Libraries

Baroness Rendell of Babergh: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a writer of fiction.
	The Question was as follows:
	To ask Her Majesty's Government what is their assessment of the condition of public libraries in the United Kingdom.

Lord Davies of Oldham: My Lords, as if we did not know that. Public libraries are vital, immensely popular and well used. Visits to UK libraries increased by 19 million between 2002 and 2004, to 337 million, coinciding with the increased variety of activities that they offer. The forthcoming audit by the Museums, Libraries and Archives Council of the quality of library buildings will clarify the current level of repair and standard of presentation. The results are expected later this year.

Baroness Rendell of Babergh: My Lords, I thank my noble friend for his encouraging and optimistic reply. Is he aware that the buildings, library book stocks and the stock of out-of-print books are generally in a very poor state? The sum spent on them represents between 1 per cent and 2 per cent of local government expenditure. Is he also aware that computer equipment originally bought with lottery money is wearing out and will need replacing from existing budgets, and that some authorities are now having to charge for access to the Internet?

Lord Davies of Oldham: My Lords, my noble friend is quite right that there are strains on budgets—but, of course, these are local authority resources. The pump-priming of the £120 million that set up the People's Network and developed computer facilities in every library has helped to increase usage of libraries. But of course there are ongoing costs, as my noble friend has identified. These are part of the support given to local authorities, but the decisions to be taken on the allocation of support to their libraries are for them to take.

Lord Clement-Jones: My Lords, the Minister has painted an extremely rosy picture, if I may say so, especially when the Department for Culture, Media and Sport Select Committee described the library service as a service in distress. It also said—and it is no wonder in the light of the Minister's reply—that the DCMS needs to raise its game. In response to the Select Committee, what in particular is the DCMS doing about the fabric of libraries in terms of lottery funding availability? What is it doing to change the standards of libraries properly to meet the needs of users?

Lord Davies of Oldham: My Lords, of course, the original development of the computer service, which is greatly used in libraries and accounts for the very significant increase in visits to libraries in recent years, is proof of the department's concern that libraries should offer up-to-date facilities. That is against a background in which we all recognise strains on local authority budgets and therefore strains on public libraries.
	But of course a number of libraries are absolute beacons of achievement. To cite the obvious one, Bournemouth library won the "Building of the Year" award a few years ago—and Norwich library is another example of a local authority being prepared to develop its facilities in a very extensive way indeed.
	Of course, I accept what the noble Lord says; there were substantial criticisms in the Select Committee report. The Government are about to respond to that report and the noble Lord would not expect me to produce that response here today.

Lord Harrison: My Lords, given the wide remit of the Museums, Libraries and Archives Council, does my noble friend think that it provides a sufficient voice for the public, who are very concerned about what they perceive to be a deterioration in public library provision?

Lord Davies of Oldham: My Lords, my noble friend is right. In some cases local communities' involvement should take a more direct form and they should have a greater direct say in the development of the facility in their locality. However, local government exists to deal with those issues. The amount of central funding that my department can offer to local authorities is necessarily limited. We seek to encourage greater use of libraries and we are encouraged by the increasing number of library visits in recent years. However, much remains to be done. My noble friend is right to emphasise the local dimension of this matter.

Baroness Warnock: My Lords, has the Minister recently visited a relatively rustic public library where the facilities are absolutely pathetic and many years out of date? I hope that the Minister can reassure me on this matter but it seems to me that a higher priority may be accorded to city public libraries than to provincial ones where perhaps the need is even greater. Certainly my local public library in Marlborough has no money and is low in the local authority's priorities. The inhabitants of Wiltshire are very badly served. I hope the Minister will say that this is not the case but I think that that is probably true of many counties.

Lord Davies of Oldham: My Lords, I do not want to generalise too much but performance is patchy. I emphasise that cities are able to concentrate their resources more successfully and therefore local people are much more aware of the large significant libraries which are often provided. There is more difficulty in that regard in rural areas. However, I believe that libraries are adjusting to the times. There is no doubt at all that libraries are aware that they have to cater for changing needs or they will not gain local support, which is essential. We should recognise that one dimension of competition for the libraries is undeniable—the fact that so many books are now purchased in paperback form at discount prices due to the hugely successful development of the publishing industry. That means that a very large number of people choose to buy books rather than to borrow them.

The Earl of Listowel: My Lords, what is being done to make public libraries more attractive to children and to develop the children's sections of public libraries and the staff who work in those sections?

Lord Davies of Oldham: My Lords, that is a very important dimension. Libraries are encouraged to recognise that links with schools are of very great significance, not least as regards the whole development of improved literacy performance in this country. We need to ensure that the reading habit starts early. That is absolutely congruent with the work which is being done, and the emphasis which is being placed, on reading in young children's education. The libraries have their part to play in that.

Driving Test: First Aid

Lord Hoyle: asked Her Majesty's Government:
	Whether they will include first aid as part of the driving test.

Lord Davies of Oldham: My Lords, the syllabus for the driving theory test taken by candidates seeking a licence to drive a car, motor cycle, lorry or bus requires a basic knowledge and understanding of first aid. Every theory test includes a question on first aid and a separate question on accident handling.

Lord Hoyle: My Lords, I thank my noble friend for that reply but I seek to take the matter a little further, particularly as 57 per cent of deaths in road accidents occur in the first four minutes. Although my noble friend says that a question on first aid is included in the theory test, surely a first aid course that is a little more than basic would be desirable as it is claimed that 85 per cent of those lives could be saved. Can we not seize the opportunity to include such a course in the driving test during the passage of the Road Safety Bill?

Lord Davies of Oldham: My Lords, the opportunity is there in the Bill, but I certainly would not seize it. There would be substantial additional costs. We would have to increase the charge for the test by about 15 per cent or 16 per cent if we introduced a serious test of the kind that my noble friend has indicated. We could also be in the position where someone had passed the theory part of how to drive safely on the roads, had passed the practical part and shown that they could control a car and carry out the necessary manoeuvres, but might fail the test because they were not good enough at first aid.
	I share the intention behind the Question asked by my noble friend, that all road users should be aware of the fact that they could come close to an accident at any time and that an awareness of basic first aid techniques could save lives. That is different from saying that passing the test should be dependent on first aid competence.

The Earl of Mar and Kellie: My Lords—

Lord Marsh: My Lords, I speak as someone who passed his test some 50 years ago. Does the Minister not have doubts about the desirability of encouraging people, on the basis of passing a simple test, to get involved in serious road accidents?

Lord Davies of Oldham: My Lords, that is certainly so, although I would counsel all of us who took the test quite a long time ago—and I have no doubt that there are several of us in this House—to be aware of the demands of the modern test. If there is a moral obligation, it is that as road users we are up to the standards of drivers who pass the test at present.
	Of course, it is the case that an adequate first aid test that guarantees that the individual gives proper help, while at the same time not being guilty of complicating matters enormously by giving the wrong kind of treatment at a serious accident, would be an extensive one. That is why I said that it would lead to extra charges for the test, extra time consumed, and probably would not really be acceptable to the public.

The Earl of Mar and Kellie: My Lords, I am in favour of formal basic first aid training for all citizens and not just for drivers. I am concerned that including that in the driver training process might make it into a certificate of attendance rather than a certificate of competence. Should not that sort of training be undertaken universally in the last year of school?

Lord Davies of Oldham: My Lords, that point is well made. We all recognise that we want schoolchildren to be able to cope with first aid issues, and certainly school offers that opportunity. The difficulty, as the noble Earl will recognise, is that the curriculum is a crowded place, certainly during exam years and the final years at school, so there are difficulties in that respect. Nevertheless, citizenship education, which is now part of the curriculum, does have a dimension of awareness and safety of one's fellow citizens.

Baroness Howe of Idlicote: My Lords, I agree that almost certainly it would not be sensible to include it in the driving test, but is it not an area where public service broadcasters could play a role in ensuring from time to time that our skills as a nation are updated?

Lord Davies of Oldham: My Lords, that is certainly a thought, although I would not be the first person to rush to a television producer with the bright idea that he should put on half and hour on first aid testing in his next programme. Nevertheless, there are certain programmes concerned with the public weal in the general sense—informative programmes—where perhaps a first aid dimension ought to be emphasised rather more than it is at present.

Lord Skelmersdale: My Lords, further to the question of the noble Lord, Lord Marsh, and the Minister's answer, we live today in a blame culture. It is not highly likely that if first aid went wrong the motorist would be sued?

Lord Davies of Oldham: My Lords, that is a danger. By definition, after any serious accident a great deal of activity follows from insurance companies. If one applied the wrong methods and caused deterioration in the person being treated, or even death where it might not have occurred if one had not attempted to be helpful, that might render one liable.

Baroness Masham of Ilton: My Lords, is the Minister aware that a blocked airway causes death within four minutes, and that all you have to do to clear it is to tip the head back? Is he aware that Slovakia has first aid as part of its test? Surely if Slovakia can do it, we can do it.

Lord Davies of Oldham: My Lords, I am reluctant to comment in great detail about the Slovakian test, as I have not experienced it recently. Our driving test is one of the most stringent in the world, but the noble Baroness's point is entirely valid. One would be in danger of not passing the test if one did not have the elementary knowledge to which she referred, which is so valuable. A range of questions are asked in the test about first aid, so that dimension is likely to be covered. A serious person submitting themselves for the driving licence test will know that fact.

EU: Financial Management

Lord Hylton: asked Her Majesty's Government:
	What steps they have taken, and will take during the United Kingdom presidency of the European Union, to ensure that the European Commission produces accounts which fully satisfy the Court of Auditors and the European Parliament.

Lord McKenzie of Luton: My Lords, Her Majesty's Government have taken a leading role in efforts to improve the financial management of the Community budget in recent years. Commission Vice-President Kallas announced on 15 June proposals for achieving an "integrated internal control framework". That should improve the depth and quality of financial management information on the Community budget, hence informing further measures to address any shortcomings. The UK fully supports the initiative and will take forward substantive discussions during its presidency of the EU.

Lord Hylton: My Lords, I am grateful to the Minister for his reply. However, in view of serious criticisms in the report for 2003 and doubts about previous years, would it not be helpful if the EU had a single senior officer comparable to the Comptroller and Auditor General to verify the direct spending of the Commission? Furthermore, each member country might have a similar officer checking that part of the EU spending that is channelled through member countries.

Lord McKenzie of Luton: My Lords, I understand the thrust of that proposal, but it does not really meet the current requirements. What is important is that proper financial controls and systems are in place throughout all countries. Part of the challenge in getting a sign-off on the budget is that much of it—something like 80 per cent—is managed at individual member state level. In recent years there have been improvements to financial controls. There are proposals for further improvements to that, as I have outlined. Indeed, a significant improvement is the somewhat belated introduction of a proper accruals accounting system.

Baroness Noakes: My Lords, why does the Council continue to recommend to the European Parliament that it should not refuse a discharge on the Commission's accounts, even though those accounts have been qualified year after year? Why do the Government not insist that the qualification of the Commission's accounts be taken seriously?

Lord McKenzie of Luton: My Lords, the Government insist that the qualifications are taken seriously. When the Council makes its recommendations to Parliament, it does so with a whole string of points and recommendations attached. When Parliament responds, it similarly has a long list of recommendations that need to be addressed by the Commission. I readily accept that the situation is far from satisfactory, but processes are in train to make it better. The Government take the matter seriously; indeed, we have been at the forefront of some of the reforms in recent years to improve matters.

Lord Marsh: My Lords, surely there is a big question to be raised over a situation that has existed for something like nine to 10 years. The answer is that every year we qualify the accounts.

Lord McKenzie of Luton: My Lords, I am trying to explain that it is important that we move on from that. The processes that will enable us to move on include a better accounting system, which has been in place from the beginning of this year. All will not magically happen overnight, because the change from a cash basis to an accruals basis produces some challenges. It is important that we get an integrated system of financial controls throughout all member states. If they can properly sign up to that, we will have laid the foundations to avoid these qualifications in subsequent years.

Lord Newby: My Lords, does the Minister agree that the UK would be in a stronger position to put pressure on the Commission if the accounts of the Department for Work and Pensions in the UK had not been qualified for no less than 15 years?

Lord McKenzie of Luton: My Lords, I do not think that that situation precludes the UK from making a strong case. As I have outlined, I am sure that it will continue to do so.

Lord Williamson of Horton: My Lords, while agreeing with the Minister, does it remain important to distinguish between the types of expenditure—some of it made directly by the European institutions and some by the member states? In the 2004 report the Court of Auditors stated that it,
	"is of the opinion that the 2003 consolidated accounts of the European Communities faithfully reflect the revenue and expenditure and the financial situation of the communities at the year-end".
	Does the Minister agree—I am sure that he will—that it is necessary to concentrate on those areas such as agriculture and structural funds, where there were problems? Overall, the result was much better this year—in fact, it was relatively satisfactory.

Lord McKenzie of Luton: My Lords, I agree that there have been improvements. It is important to recognise that the statement of assurance is, on the one hand, looking at whether the accounts are reliable and reflect actual income and expenditure and, secondly, whether the expenditure has been in accordance with the policies and the legal framework that has been set up to conduct those policies. Most of the criticisms have been in respect of the latter—but some of those criticisms are in respect of irregularities that might be of the nature of an incorrect classification against a budget head, while some might be more serious. It is very important that this matter is seen in context and that we are not alarmist about where we are.

The Earl of Liverpool: My Lords, can the Minister give the House the actual figure that the Court of Auditors estimates is lost to fraud each year?

Lord McKenzie of Luton: My Lords, I do not have that figure to hand. My understanding of what happens is that the Commission produces a report each year which contains figures that identify the extent of fraud, but I stress that the reference to irregularities in a Statement of Assurance do not equate with fraud in every case. In fact, I think that it has been estimated that something like 20 per cent of identified irregularities might have an element of fraud attached to them. That remains a huge task which needs to be addressed fully and effectively.

Zimbabwe: Asylum Seekers

Lord Roberts of Llandudno: asked Her Majesty's Government:
	What steps are being taken to end the hunger strike of failed asylum seekers from Zimbabwe.

Baroness Scotland of Asthal: My Lords, we are unable to force people to eat or drink, as this would be against their wishes and would be classed as an assault. However, we are closely monitoring anyone refusing food to ensure that they receive all appropriate medical care.

Lord Roberts of Llandudno: My Lords, I am very disappointed by the Minister's response. She will recall that on Monday, in response to the Statement that she repeated on Monday, 13 people spoke in this Chamber. Everyone deplored the Government's deportation to Zimbabwe policy. Do the Government listen to the Archbishop of Canterbury, the Cardinal Archbishop of Westminster, the Refugee Council and numerous other organisations, all of whom are totally out of tune with, and wholeheartedly disapprove of, the Government's policy of deportation?

Baroness Scotland of Asthal: My Lords, I assure the noble Lord that we do listen. Indeed, the concern that has been expressed by many noble Lords, as I have said many times from this Dispatch Box, as has the Leader of the House, is shared by this House. But we have to remember that the tragedy is that it is not just Zimbabwe that finds itself in difficulties—other countries do, too, including Algeria, Angola, the Democratic Republic of Congo, Liberia, Nigeria, Rwanda, Sierra Leone, Uganda, Sudan, Somalia, Burma and Afghanistan. All of those countries are in very tense and difficult situations, and the Government of this country have come to the conclusion that, when determining whether we should give asylum, we should look at the individual and make an assessment in relation to that individual's needs.

Baroness D'Souza: My Lords, will the Minister acknowledge that the facts of torture and ill-treatment, especially of political opponents in Zimbabwe, are now well documented and that to return asylum seekers in this context is an infringement of international treaties that govern human rights?

Baroness Scotland of Asthal: My Lords, of course I accept that it would not be justified to return people who fall within the 1951 convention or in cases where the European Convention on Human Rights applies. We do not do so. We will not be removing anyone who would face persecution on return to Zimbabwe. Members of the opposition in Zimbabwe who establish that they have engaged in activities that will cause them to be persecuted by the Zimbabwean Government will have established that they have a well founded fear of persecution and will be in a position to make application and be granted asylum, so the question of their removal does not arise. I emphasise that the only people who will be removed will be those who do not have a well founded fear of persecution and therefore do not need international protection.

Lord Howell of Guildford: My Lords, I appreciate that the Government are in a very difficult position and that it must be very difficult to defend. Did the Minister see the story in the Times yesterday that after our exchanges on Monday there appears to have been a change of policy and there is some kind of unofficial moratorium on sending anyone back to Zimbabwe for the time being? Is that the position, or are people still being sent back? Has the Home Office had a chance to catch up with the Foreign Office's new assessment, made in the last week or so, that the situation has become very much more dangerous? If people are being sent back, are they just those who are not members of the opposition, but supporters of Mugabe? Does the Home Office think that even they will get anything other than short shrift in the light of Mugabe's accusation that everyone sent back is a British spy?

Baroness Scotland of Asthal: My Lords, I reiterate what I have already said. The noble Lord, Lord Howell, knows very well that each and every application goes through a judicial process of review, appeal and re-review. Before any person is returned, consideration is given to the circumstances of that return. We will continue to do that on an individual basis. I reassure the noble Lord that the Home Office and the Foreign Office are working very closely indeed on this matter. It is for my right honourable friend the Foreign Secretary to determine on a country basis whether return is appropriate. That will then be conveyed to the Home Office and we work together on that issue. There is no division on it, and I can assure noble Lords that the Foreign Office and the Home Office are in constant contact.

Lord Steel of Aikwood: My Lords—

Lord Judd: My Lords—

Lord Steel of Aikwood: My Lords, there has already been a Labour question. Is the Minister aware that there is real concern about the administration of the Home Office in these individual cases? I wrote to the Home Secretary a month ago, following representation from Cardinal O'Brien about a Zimbabwean held in Scotland who was being deported on the grounds that there was no evidence that he had been tortured, despite the fact that he was branded with a swastika. The only reply I have received is a postcard acknowledgement more than a month later, addressing me as a Member of the Scottish Parliament, which I left two years ago, at the House of Commons, which I left eight years ago. If the Home Office makes such elementary mistakes dealing with a Member of this House, how can we have any confidence that it deals properly with these individual serious cases?

Baroness Scotland of Asthal: My Lords, your Lordships have confidence because the judicial system in this country is still sound.

Lord Judd: My Lords, my noble friend has stressed that the position of the individual is taken very much into account. I am sure that is done conscientiously. Is there not a problem that the exercise of power is so arbitrary and the situation so volatile that it is very difficult to make a certain decision about the well-being of a particular individual in a situation which can change overnight?

Baroness Scotland of Asthal: My Lords, of course that issue is of concern. I say again that if one looks at many of the countries that I mentioned earlier—for instance, if we think about the dreadful occurrence in the Congo—the same issue can be raised in relation to other circumstances. All I can do is to reassure noble Lords that the process through which these applications are put is robust. Such applications go through layer after layer. Those procedures will continue and we shall continue to monitor the situation and keep it under constant review.

Business

Lord Grocott: My Lords, with the leave of the House, a Statement will be repeated later today. The Statement is on the European Union and will be repeated by my noble friend Lord Triesman. We shall take it during the course of the debate initiated by the noble Lord, Lord Phillips. The precise time will be after the contribution by the noble Lord, Lord Chan.

Business of the House: Debate this Day

Baroness Amos: My Lords, I beg to move the first Motion standing in my name on the Order Paper.
	Moved, That the debate on the Motion in the name of the Lord Phillips of Sudbury set down for today shall be limited to four hours.—(Baroness Amos.)

On Question, Motion agreed to.

Criminal Justice (Northern Ireland) Order 2005

Baroness Amos: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
	Moved, That the draft order be referred to a Grand Committee.—(Baroness Amos.)

On Question, Motion agreed to.

Children and Adoption Bill [HL]

Lord Adonis: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That it be an instruction to the Grand Committee to which the Children and Adoption Bill [HL] has been committed that they consider the Bill in the following order:
	Clauses 1 to 4
	Schedule 1
	Clauses 5 to 14
	Schedules 2 and 3
	Clauses 15 and 16.—(Lord Adonis.)

On Question, Motion agreed to.

Decentralisation

Lord Phillips of Sudbury: rose to call attention to the case for decentralisation and greater local autonomy and their effect on citizen and community vitality; and to move for Papers.
	My Lords, in this debate we have a broad canvas on which to paint. In opening, I shall be necessarily impressionistic. Perhaps at this early stage in the parliamentary cycle it is appropriate for us today to be more diagnostic than prescriptive. It was partly faulty analysis of the main needs of the European Union which led to the recent debacle of the French and Dutch referenda. Earlier we had the thumping "No" in the referendum on regional government in north-east England. Evidence of political disaffection and mistrust is abundant. We politicians are not listening too well.
	So I hope that we can also afford to lower our partisan guards, debate strategically and venture bold ideas without being defensive about past failings.
	Forgive my shorthand if I describe the kernel of our predicament in terms of probably the most centralised democracy on earth in the midst of a rapid decline of community life; a decline which is not adequately compensated for by new networks and relationships; and a decline which, with the inexorable dilution of that identity, loyalty and all-embracing mutuality, which are the essence of community, bedevils so much else we grapple with in this place. Just think, for example, of the hatful of recent legislation combating anti-social behaviour, which provides indisputable evidence of community decay in the midst of material plenty.
	Although they have claimed to uphold the virtues of organic localism, all governments of the past 35 and more years share responsibility for the relentless and clumsy centralisation of powers, and the often clumsier use of them. Perhaps the most perverse chapter of that was the Thatcher years. It suggests three awkward realities. First, many potent centralising influences are outside government. Among them are mobility; developments in communications; a metropolitanised media; disengaged transnational business and concomitant managerialism; the rapid shift in cultural patterns; changing personal agendas and morality; and, perhaps above all, rampant materialism and individualism, which shape much of the overall context.
	Secondly, it is apparent that the continuing disintegration of the settled, geographically based Britain in which most of us grew up is a self-reinforcing process that it is impossible for Governments alone to counter, yet the allied temptation to try to buy voluntary-sector support for their programmes is two-edged.
	Thirdly, it is now surely clear that legal regulation and intervention are no substitute for organic self-regulation, but can easily oust what is left of it. Over-legislation provides both the means of concentration of control and an equal and opposite disempowerment of local government and its citizenry. In 2003, for example, this Parliament pushed through 13,407 pages of new law, much of it barely scrutinised. Taking account of repeals, that meant a net increase of about 10,000 pages. That exceeds comparable countries by a factor two to four times. The cumulative effect is at the root of civic powerlessness and insignificance that extends well into the middle classes.
	That torrent of statute law, which concentrates power in the hands of experts, is the fruit of the voting system. This delivers disproportionate majorities, which in turn encourage production-line legislation aided by a draconian whipping system reinforced by massive ministerial patronage. Labour, do not forget, has not lost a single whipped vote among thousands of votes since it came to power in 1997. God bless this unelected House, many say.
	As to the general political malaise, what does one expect from an election where, on a miserable turnout of 61 per cent, Labour, with 35 per cent of the vote, got 55 per cent of all MPs, an overall majority of 66. Can one really legislate for the whole electorate with the support of only 22 per cent of it? What is the real legitimacy of manifesto pledges in those circumstances? Incidentally, having voted in 11 general elections and fought four of them, my votes have never counted, and probably never will.
	Looked at from the grass roots, as Liberal Democrats are traditionally happy to do, I suggest that alienation from centralisation is related, first, to the geographical distance from the centre; secondly, to the powers of those at the periphery compared with those at the centre; thirdly, to the real degree of genuine engagement by the centre with local opinion; fourthly, to the inexperience of those devising the legislation of that which they are legislating about; and, finally, to how often Governments change policy and law.
	It is not, of course, that things are necessarily done well locally, but we have all surely learnt the hard way that unless people own their institutions they will not care for them or be responsible for them, let alone give them their allegiance. Democratic ownership is a funny business, made up of as much heart as head, defying the rationalities of the mandarins and governors—elected or otherwise—who are increasingly deracinated, seeming to rely ever more on their technical superiority and cleverness. Pragmatic wisdom and real life experience are indeed in short supply.
	At the moment, I suggest, we are in unthinking denial. Many of our fellow citizens—ironically, especially the rich—believe that there can be a good society without putting much back into it. Look at the professions—mine very much included—and see how far they have shifted from major public engagement to mere private acquisitiveness.
	We also need trust at all levels. We need less selfish assertiveness, less puerile reliance on competition as the modern substitute for the co-operation of yesteryear. Individualism without communal engagement, or bowling alone, as Robert Putnam put it in his book of that name, has led to a collapse, too, of community life in the United States, which in so many ways is better off than we are. He stressed the decline in social networks and investment, just as here Professor Richard Sennett of the London School of Economics has followed comparable lines emphasising the importance of actual embodied sociability rather than virtual substitutes.
	Thank goodness, therefore, that many are now focusing on work-life balance. The pressures of getting and spending lay waste our powers and deprive civic life, not to mention family lives and relationships, of their fair share of our time and energy. Bizarrely, we have never been remotely as rich materially or as poor in relational terms. Public esteem, which feeds into personal esteem, is now enjoyed by few.
	So when Tony Blair's wrote in a 2002 Fabian pamphlet that he,
	"recognised and understood the need to let go",
	one might ask: where is the evidence? And although one of his early policy action teams rightly emerged with the key finding that the secret of community revival was self-help, how has that been evidenced in government policy? No doubt the noble Baroness will tell us. In saying that, I acknowledge the great feathers in the Government's cap of the Scottish Parliament and the National Assembly for Wales, as I do their work on poverty and employment.
	I shall not steal the thunder of my colleagues and other distinguished speakers today by enlarging on the subject of this debate as it affects education, health, local government, local financing, and law and order. I particularly look forward to the three maiden speeches to come and warmly welcome those speakers to their first debate.
	I will end with an admission and a tonic. One ineluctable feature of the decentralised state is its natural diversity. What for the centralist is disparaged as the postcode lottery is for the devolver the wondrous milky way of local autonomy. The latter means facing squarely the variety—the inconsistency, indeed—that the slaying of state giantism via the replenishment of local government powers must entail. It always amazes me that worshipers of choice in the marketplace are often monopolists in the political forum. Yet it is clear that a plethora of national criteria, targets, tables, standards and the like have, with their bureaucratic overburden, demoralised and drained professional fulfilment from those subjected to them. A succession of new initiatives and regimes in education, health, policing and local government has too often stifled rather than enhanced. As others will demonstrate, we must relinquish much of that control-freakery and teach the public to stop looking to the nanny state but rather to shift for themselves. Therein lies political renaissance.
	Balancing conflicting public expectations is difficult, of course, but we desperately need a bonfire of central controls and quangos. We need, as Ed Davey MP put it, to defeat,
	"the centrifugal forces of Whitehall and the national media".
	Having said all that, I should like to end on an upbeat note. Our communitarian genes are deep and resilient. The voluntary sector is an everlasting source of encouragement. In my home town of Sudbury, we held a community fair last February. From a population of fewer than 20,000 we unearthed no fewer than 280 voluntary organisations, of which 153 manned stalls in the church and town hall on a cold Saturday. It was really inspiring.
	Well over half the adult population is still regularly involved with some voluntary or community activity, and more than 300,000 charities still do their work, the majority of them locally and the vast majority without any paid assistance. I beg to move for Papers.

Baroness Seccombe: My Lords, I welcome this important debate and look forward greatly to hearing from the three maiden speakers. I wish them well. I thank the noble Lord, Lord Phillips of Sudbury, for giving me the opportunity to let off steam.
	In our party's recent manifesto, we laid great emphasis on the importance of regenerating local civic pride and rebuilding local control and local responsibility. Twenty years ago, a Conservative government made mistakes in increasing central control over local councils. We accept that as a party and we have learnt from it. However, nothing compares with the manic centralisation of the past few years—the explosion of regulation; the proliferating regimes of inspection; the march of central targets; and the mushrooming of guidance notes, codes of practice, risk assessments and duties to comply with the effluent of the legislative sausage machine that has been, and still is, working overtime.
	There is not a doctor's surgery, school governing body, hospital trust board, chief constable, magistrate or local authority chief executive not looking with dread at the daily in-tray for the next piece of dictation to arrive from Whitehall or its numberless phalanx of quangos. Up and down the land, head teachers are battling with Whitehall paperwork; village hall committees with mindless bureaucracy; sports clubs with health and safety advisers; and universities with politically correct commissars telling them whom they should admit. Words were the making of this Government, and I have no doubt that they will be their epitaph.
	Local variety, enterprise and initiative are being stifled. We are losing colour, common sense and our sense of community. We are losing much of what made it distinctive to be British. Are we a better country because a centrally imposed system of licensing has extinguished the old right of Cambridge University to run licensing in its precincts? Will we be a better country if centrally imposed standards on school days and hours lead to the closure of a private nursery school with which parents are well satisfied? It is way beyond time to call a halt to it all, and the Motion moved by the noble Lord, Lord Phillips of Sudbury, would be a good place to start.
	The basic difficulty with the way in which the Government approach so many things is that they still believe that the men in Whitehall know better and, as Mr Austin Mitchell so brilliantly put it on Tuesday in another place, the "cherub geniuses" in Downing Street know best of all.
	I welcome the affirmation in the gracious Speech—a promise that, I hope, will be kept—that there should be less regulation. If any regulation is reduced, the irony will be that the Government reducing it will be the same people who introduced it in the first place. It is a real Grand Old Duke of York promise: they regulated up to the top of the hill, and they are deregulating them down again—we hope.
	I do not claim that the Government alone are guilty of centralising. What an error it was, for example, for banks to take responsibility away from local branches and local managers who knew their patch and hand decisions over to remote automatic computers. It is no wonder that the reputation of banking is plummeting. We now hear cases of people being charged loan-shark rates of interest for the stopping of a tiny direct debit that an old-style manager might never have stopped in the first place. Now, most people cannot even telephone their bank branch, and, as I know from experience, if a mother is asked to help her son or a husband his wife, they are told by someone—in India as likely as not—that they cannot do so because of the Data Protection Act 1984.
	Can the Minister tell the House—if she cannot, will she please write to me—what will happen with the computerisation of the NHS and the rolling out of the ID card with regard to access to public services, especially if the system ever becomes compulsory? If, as is said, it may in time be necessary to provide a biometric card to gain access to a library or to make a doctor's appointment, how will it be possible, given the Data Protection Act, for a friend to pick up a library book for an elderly person or for a wife to make a medical appointment for her husband?
	Are not central computer systems in danger of breaking up family cohesion and making it harder for one person to help another? I worry about that and would appreciate specific advice from the Minister on how it will be avoided. People do not want to be numbers on a card or a computer. They want to be treated as individuals by individuals. Surely, that is the right of every person born into this free country. British people are not servants of the state. The institutions of government are there to serve them.
	To give another example, how is it that the unelected head of a quango, the Passport Agency, can suddenly give an interview to a newspaper—naturally, he did not deign to tell Parliament—announcing that to be allowed to travel abroad, British citizens will henceforth have to go cap in hand to an interrogation centre to ask for the right to a passport. I ask: at what cost in time, in inconvenience, in bureaucracy and why? Who authorised that? Currently, we have a perfectly effective localised service where people can have passports delivered to them in their homes. Who decreed that to be free to travel English people should go to government centres to be interrogated? I worry about that.
	We need to build up personal choice; we need to protect family cohesion; and we need to increase local diversity and accountability. I was a strong supporter of a policy in our manifesto to allow local people to elect their local police chief directly so that policing would reflect local priorities—not targets handed down by Whitehall. Do the Government have any intention of pinching that Conservative policy?
	I strongly supported the abolition of unelected regional assemblies that suck power and money away from local councils. Following its rebuff by people in the north-east, will the Government consider abolishing those? I strongly back plans to restore authority to local councils over planning. It is surely intolerable that Mr Prescott can order perfectly good terraced housing to be demolished in the north or suburban gardens and green countryside to be built over in the south. It is an affront to local accountability. Will the Government think again about that?
	I strongly supported the plans we had to scrap whole swathes of pointless bureaucracy imposed on local authorities from the centre, going under appalling acronyms such as CPA, BVPIs, AMPs and so on. Senior local authority executives have counted the cost of this in possibly billions of pounds. I find a certain irony in the Government talking about localism, but imposing a national straitjacket on local authorities through inspection regimes—and a straitjacket it is.
	A local council may have been elected on a platform that appeals to its residents. But it is a brave authority that says it is prepared to do badly in the inspection process because those things are not as important to its electorate as other issues and because they consume scarce resources. Far too much time and emotional energy—the greatest drain of all—are spent by senior local authority managers and members feeding the inspection beasts. Surely all that time and energy could be put to so much better use, like service improvement.
	So perhaps I may address my concluding remarks to the Audit Commission. What could be more demoralising than for local authorities to jump through the hoops and then find someone changing the rules? That is what the Audit Commission is doing. I ask the Minister to look into this for it is causing wide concern at local level. After peddling one model of comprehensive performance assessment, the commission has now produced another. The new model claims to be strategic regulation, but it is not. A tremendous amount of work is asked for from local authorities in preparing self-assessments and position statements—all time that will not be spent on providing local services.
	Just as scores of local councils have proved their improvement, the Audit Commission arbitrarily moves the goalposts and introduces a new, self-proclaimed "harder test". What is the consequence of a council suddenly being marked down to a low score on tests it was never set before? What does that mean for the morale of members and the residents of the area?
	I used to hold the Audit Commission in very high regard, but its behaviour here is arbitrary by any measure and some of the indicators it is proposing are, frankly, absurd. It represents a serious disappointment by its high standards and makes a strong case for aspects of its own role to be reviewed. For if we do, as we all say we do, really believe in localism, why not leave the local electorate to be the judge of performance, effectiveness and value for money? That surely must be what localism really means. If only the Government and their agencies could understand the importance of that, this country would be a far, far better place.

The Lord Bishop of Southwell: My Lords, we should be grateful to the noble Lord, Lord Phillips, for raising this very important subject for our discussion today. The Church of England and, I believe, all faith groups in the United Kingdom are uniquely placed to make a positive contribution to any discussion on decentralisation and the importance for citizenship of the healthy and diverse local provision of public and other services and better ongoing community engagement in all aspects of modern life.
	It might seem a rather hackneyed truism, but in the life of the Church, as in the community more widely, local is often what matters most—certainly to individuals and families seeking to make sense of, and the most of, their lives. George Orwell's threat of an end to diversity and the establishment of Big Brother, graphically exhibited in 1984, is not a thing of the past and community vitality, as underlined by the noble Lord, Lord Phillips, requires constantly to be nurtured and affirmed.
	The General Synod of the Church of England, a body as richly diverse as your Lordships' House, meets shortly in York. The location is important and relevant to our discussion today. The noble Lord, Lord Phillips, referred to the geographic or perceived distance from the centre. Apart from acknowledging the northern province of the Church, it also acknowledges that the Church as an institution is rooted throughout England—parish by parish, urban, rural and suburban. And in terms of history and contemporary understanding, the Church is neither London-centred nor top-down in its approach to ministry and community engagement. I believe that this helps us in an appreciation of some of the issues before us today.
	Way back in 1985, the Church of England published Faith in the City. The report was prepared by the then Archbishop of Canterbury's Commission on Urban Priority Areas. It was set up by the late Archbishop Robert Runcie and it was a call for action to the Church and to the nation. The report highlighted the growing number of people and places that were experiencing disadvantage and exclusion at a time when others were experiencing economic boom. Although the focus was on urban matters, the message was, and to a great extent remains, universal, and the Church has promoted similar work looking at such problems in rural areas.
	The latter work enabled, for example, parish-based ministry, working with others in local communities, to respond quickly and by all accounts effectively when many such communities were traumatised by blows such as BSE, foot and mouth disease and swine fever.
	The local parish-based structures of the Church and their often longstanding relationships with secular and charitable organisations working locally provides a rich source of evidence, I believe, suggesting that there is a lot to celebrate in terms of healthy communities working and living together throughout these islands. But they must be supported. Those charged with the responsibility of government, at every level, need to keep the health of local communities and all who constitute them constantly in mind, certainly in a manner in which much and such public administration is delivered to them.
	The substantial body of evidence and commentary drawn together 20 years ago in the Faith in the City report, to which I referred, continue to be the subject of work and engagement right up to the present day. The Church is being invited into many new partnerships and patterns of engagement alongside other faith communities. That needs to be underpinned by both resourcing and, of course, theological thinking.
	The Government say that their vision is of an "urban renaissance", one which depends on individuals and communities playing their full part. We need to think differently in the light of the changes that are affecting our urban and, increasingly, our rural communities.
	In many ways these changes become apparent in the events that make our news headlines: the eruption of violence back in 2001 in northern cities; the low turnouts, already referred to, in general and local elections; the crisis—or at least the severe and real dislocation—in the relationship between urban and rural populations. All point to a time of critical opportunity and challenge for all of us—for faith groups, tiers of government and, importantly, within and around the diverse communities we are all trying to serve.
	A greater awareness of regional identity and relationships has, of course, been fostered through the creation of the regional development agencies and an enhancement of the role of regional government offices. The former is now expected to take the lead in the allocation of resources for area-based regeneration. Regional performance is considered vital in the context of Europe, where many nations have cohesive regional economies and more regular distribution of resources and population. But, as a Bishop, I remain concerned about increasing regional disparities in economic performance, employment, house prices and, indeed, media profile, as well as the treatment and inclusion of faith communities in regional strategies.
	London, of course, continues to stake out its place as a global city in a context that places other British cities in a completely different league. Significant questions exist concerning London's ability to develop appropriate strategies for regeneration and redistribution within itself and its relationship with other places in the United Kingdom and abroad.
	We are all increasingly aware of the European and global dimensions to issues of employment, corporate culture, migration and notions of belonging as well as identity and home.
	The Church is uniquely placed to provide an overview of regions from outside the business and local government perspectives. The interests of rural and urban communities, and often the poorest members of those communities, can be advocated by the Churches and other faith communities. There is, however, a need for greater liaison between those engaging with regional government bodies within and across the regions. It is vital that this level of engagement is undertaken in an ecumenical context which acknowledges the interfaith dimension.
	Twenty years on from Faith in the City, the Church of England, working closely with other United Kingdom faith groups, continues to celebrate the local and national partnerships that must succeed so that citizenship is enhanced and community vitality affirmed, and, indeed, Big Brother kept at bay.
	The Commission on Urban Life and Faith was launched at a meeting in this House in February last year. The Commission on Urban Life and Faith is a group of experienced practitioners on urban issues drawn from different communities around the country, all of whom have a commitment to improve life in disadvantaged urban areas. The commission's aim is to promote a realistic and positive vision of urban life and the contribution of people of faith, based on an analysis of tension, delights, injustices and the needs of contemporary city and urban living. As a key part of that work, the commission has rightly spent time looking at issues of concern to young people—the local communities not just of today but also of tomorrow.
	In conclusion, I pay tribute to the reverend noble Baroness, Lady Richardson of Calow, for her work as chair of the commission and to the noble Lord, Lord Phillips, for initiating this interesting and vital debate. Like other noble Lords, I look forward to the maiden speeches of the three new distinguished Members of the House.

Lord Foster of Bishop Auckland: My Lords, I am delighted to be able to make my maiden speech in a debate that goes to the heart of the health of local democracy and to the heart of the debate about trust and politicians.
	At the outset, I have a confession to make. In 1975, together with everyone else who attended the Labour Party conference of that year, I voted to abolish your Lordships' House. On that occasion, we were all gently chided by one of my mentors, Lord Shinwell, who reminded us that he had voted to abolish your Lordships' House in 1929. After a very long and very distinguished career in another place, he said, "I had nowhere else to go". I leave it to your Lordships to judge whether I have nowhere else to go, but if that is the case I can think of no better place to go.
	I used to chide my younger colleagues in the other place that they were not proper politicians if they could not speak for 10 minutes without engaging the brain. Again, I leave your Lordships to judge whether on this occasion I have taken my own advice.
	I came into politics 33 years ago, the son of a shipyard worker in Sunderland, who had been unemployed for seven years during the 1930s. It is not surprising that I had one or two small matters on my agenda when I entered politics, such as abolishing poverty, abolishing unemployment and abolishing educational inequality. My commitment to those objectives has remained firm over all those years and my noble friends on the Front Bench espouse those objectives too. Over the years some progress has been made.
	I had another objective, which was to prevent too much power ending up in too few hands. Perhaps it was the nonconformity that I learnt at my mother's knee. I leave your Lordships to speculate how someone who was a nonconformist to his finger tips ended up as the agent of conformity for 10 years in the other place. How that happened I cannot tell. Because of that nonconformity or for some other reason, I have always been a decentraliser and a devolver, both by instinct and by experience.
	Perhaps I may be allowed to refer to my former constituency, the town of Bishop Auckland, by way of example. Perhaps the only thing for which Bishop Auckland is known throughout the world is its superb amateur football club. In the 1950s and 1960s the team regularly ended up in the final at Wembley playing in front of 100,000 people. The people of Bishop Auckland are rightly proud of that great football heritage. They are also proud of the fact that the town has been the home of the bishops of Durham for 800 years.
	A few miles down the road is Shildon. In 1825, slightly before my time, Timothy Hackworth began to build rail rolling stock in the town of Shildon. The building of that rolling stock went on until 1983, sometimes employing 2,600 people. The people of Shildon tend to celebrate their railway heritage now because of the efforts of Shildon Borough Council and the National Rail Museum at York where they have Locomotion, a rail museum with 60 rolling stock, which has attracted approaching 150,000 visitors in the short nine months since it opened.
	A few miles in another direction, in Spennymoor, people are immensely proud of their mining heritage. I will be marching behind the Spennymoor town band at the miners' gala as I have done every year for the past 15 or 20 years. The gala is a great celebration of mining. It is such a moving occasion, when you watch 30 bands coming over Elvet Bridge with banners flying and stopping in front of the hotel in the centre of Durham.
	All of those are sources of immense pride in my communities but I am even more proud of the miners' settlements in Spennymoor because they have nurtured many painters among former miners who are of regional significance—and two who are of national significance; Tom McGuinness, who worked for 50 years in the mines in Bishop Auckland, and Norman Cornish, who was also a miner in Spennymoor.
	I have only Teesdale left to mention out of my former constituency—almost 600 square miles of the most glorious countryside in the whole of the north of England. Barnard Castle boasts the national gem of the Bowes Museum under its very able young director, Adrian Jenkins, which is chaired most ably by the noble Viscount, Lord Eccles, who I am glad to see is in his place.
	If we are to regenerate further these communities we can only do so by building on their already established sense of civic pride in their history. That cannot be done by central government from the top. Of course, there has to be a strong strategic centre. If we had nothing but centralisation, I fear that we would end up with chaos. We need a strong strategic centre voting on policies and allocating the money to allow interesting things to happen at local level. However, we can regenerate communities only by releasing the skill, commitment and creativity of local people.
	Local government, as well as national government, can be centralising. Our message ought to be directed at both central and local government. No regeneration of communities can take place without engaging the skill and creativity of local people.
	We are not only talking about the health of local democracy this morning; the matter goes to the reform of the public service. We have tested to destruction the view that you can micromanage the health service from the centre. We have learnt that you have to release the skill and creativity of people at the sharp end. We have all learnt that, but I am not certain that we have learnt the mechanisms by which it can happen. Perhaps that is because there are echelons of managers who have been brought up in the command-and-control culture and find it difficult to learn that managing these days, both in business and in public service, is a matter of releasing the skill and creativity of the workforce. I look forward to the Government pursuing that agenda with even greater vigour.
	I am very pleased to have been allowed to make a small contribution to this debate, and I hope that other opportunities occur.

Lord Chan: My Lords, I warmly congratulate the noble Lord, Lord Foster of Bishop Auckland, on his eloquent and thoughtful maiden speech. I first met him when he was a Member of Parliament, and I visited Bishop Auckland as part of a small group representing the Commission on the Future of Multi-ethnic Britain, in 1999. It was a most revealing and helpful visit, to see the disparity of those who were very poor living side by side with those who were very affluent—and the lovely countryside of north-east England.
	After a long and illustrious career in local councils in the north-east of England, and 26 years in the other place, I have no doubt that the noble Lord will make very important contributions in future debates, particularly in the fields of economic development, employment and the environment. He also has very interesting and broad-reaching contacts; for example, he is a member of the Salvation Army and has a tremendous interest in youth affairs. I am delighted that he is here and look forward to his valuable contributions in future debates.
	I also congratulate the noble Lord, Lord Phillips of Sudbury, on securing this debate on a topic that particularly affects service delivery and the well-being of all citizens and communities. I shall focus on health and social care-related issues, drawing on my experience in Merseyside, which is an area where significant pockets of socio-economic deprivation are located close to affluent communities.
	To provide services for the needs of those two distinct population groups with very different needs would require careful local planning. However, quality of services is best regulated through standards set at the centre. That arrangement is to be found in healthcare: standards are set by the centre through National Health Service frameworks, treatment guidelines provided by the National Institute for Clinical Excellence—NICE—and supported by agencies such as the National Patient Safety Agency and the National Clinical Assessment Authority.
	The performance of local primary care trusts and hospital trusts is self-assessed by the local trust's audit committee, corporate and clinical governance groups and the finance committee, all led by non-executive directors. Here I declare that I am a non-executive director of Birkenhead and Wallasey PCT; I also serve on a steering group of the National Clinical Assessment Authority.
	Good policies do not guarantee improved service delivery, because delivery depends on effective implementation of policies locally. In the past four years, the Government have directed healthcare services from the centre by setting numerous targets for primary care trusts to achieve annually in order to be awarded star status, ranging from zero to three stars. Rewards worth £1 million each have been given to three-star primary care trusts every year—and I am pleased to report that mine is one of them.
	This system of centrally led healthcare delivery has produced limited improvements in patient satisfaction and in the health of communities. It has also caused staff to become frustrated with having to work to targets that do not necessarily improve the health of patients. Not surprisingly, the second phase of the NHS Plan announced six months ago emphasised a moving away from national to local initiatives. This new phase has been labelled the patient-led NHS. It is based on patients' choice through information and involvement with greater influence of primary care and GPs through local staff leadership and motivation.
	Before we become excited by the prospect of local autonomy I inform your Lordships' House that more changes are envisaged in the work of PCTs and hospital trusts. A system of listening to patients and local residents is still rudimentary. One excellent example of this is the National Patients Survey (NPS) programme introduced in 2001 by the Department of Health. Listening to Patients is the collaborative annual survey of PCT patients first surveyed in 2003. Every PCT pays its share towards the commissioning of that survey.
	A significant finding was that in 2004 some 70 per cent of those surveyed were content with the information they received about side-effects of medication prescribed for them, which means that 30 per cent of them were not. As a result PCTs on Merseyside are changing their contracts with community pharmacists to ensure that pharmacists will speak with every patient collecting their medication to discuss any medication issues. The report states that when patients were asked whether they had asked a pharmacist for any advice on medicines in the past 12 months, 26 per cent said that they had. Of this group 82 per cent said that the pharmacist's advice was definitely helpful and 4 per cent said that it was not helpful.
	Clearly, eight out of 10 of patients on Merseyside do not speak with pharmacists. Therefore, it is important for the community pharmacist to initiate conversation with patients and ask them if they have any concerns regarding their medication, how they are to take their medicines and how to reduce side effects. If that were to take place, it would reverse the high proportion—about 70 per cent—of patients on Merseyside who do not complete the course of medicines prescribed by their GP or hospital doctor.
	Computerisation of GP clinics is being developed so that primary care doctors may send information on their patients to hospital specialists through secure systems. If I may be provocative, an alternative system of sharing patient information would be for all users of the NHS to carry identity cards holding personal information about their health to share with GPs and hospital doctors.
	Another example of local autonomy that will rapidly improve public health is that of having smoke-free workplaces. On Merseyside local authorities and NHS trusts have been more focused on achieving smoke-free workplaces that include shopping malls than the Government have been on their proposal to allow smoking in public houses where no food is served.
	Public consultation on Merseyside has demonstrated that the majority of smokers also support smoke-free workplaces, public houses and shopping malls. The importance of this finding is particularly significant when we realise that Merseyside has the highest rate of lung cancer in England. Local autonomy on Merseyside has led to very sensible decisions on improving public health. Therefore, I hope and trust that central government will support local authorities and local groups on this most worthy decision to promote smoke-free workplaces, public houses and shopping malls especially the Bills for a smoke-free Liverpool and London.
	The Government have made health and the NHS a priority. Spending on the NHS by 2008 is set to double that which was given in 2000. To achieve the maximum benefits the Government must trust local people who care and who are dedicated to improving the health and well-being of local communities. Appropriate services, whether provided by public or private sectors, should seek to meet the needs of people where they live. To be relevant and effective, service provision and delivery must be locally determined. I look forward to hearing the Minister's views.

European Union

Lord Triesman: My Lords, with the permission of the House, I shall now repeat a Statement made by my right honourable friend the Foreign Secretary.
	"With permission, Mr Speaker, I should like to make a Statement on the European Union.
	"Earlier today, I published a White Paper on the prospects for the European Union covering the next six months, when the United Kingdom will hold the presidency. Copies are available in the Vote Office. Let me first comment on the current situation in the European Union, before coming to the priorities of our presidency itself.
	"The European Union's historic success is centred on three major achievements. It has cemented peace on a continent whose history has been one of rivalry and bloody conflict. It has helped to heal the divisions of the Cold War, and to entrench liberal democratic institutions in countries emerging from dictatorship. It has created the world's largest international single market of 450 million consumers.
	"All this has brought greater prosperity to businesses and citizens across Europe, while safeguarding the strong attachment to social justice that is common to all Europe's different economic models. The United Kingdom has benefited greatly from this unique collaboration between nations. Yet the EU must adapt to survive and to prosper in a world quite changed from when it was founded some 50 years ago. It needs, first, better to respond to the sense among European citizens that the EU is remote from the concerns of their daily lives. That was brought into sharp relief by the "No" votes on the EU constitution in two of its founder members.
	"Compounding that sense of unease with the EU is the fact that Europe's economies face greatly increased global competition. Soon 50 per cent of all manufacturing exports will come from developing countries. China's overseas trade is doubling every three years. China and India are producing four million graduates a year competing with European firms in the highest-skilled sectors. The EU must deal with such competition by becoming more dynamic and investing more in training and innovation. It has also to tackle more effectively new threats to our security—from terrorism, proliferation and international crime—and respond to the moral and political imperative of improving living standards and well-being in the world's poorest nations.
	"Europe's nations are now beginning an important debate on meeting those challenges. As my right honourable friend the Prime Minister said in Brussels last week, in our presidency the United Kingdom will seek to conduct this debate in an open, inclusive way, giving our own views strongly but being respectful of the views of others.
	"Alongside the wider questions of the EU's future direction and priorities, there is much specific business to be done in our presidency. Let me take four key areas of the agenda in turn: first, future financing. As the House is well aware, two weeks ago the European Council could not reach agreement on the EU's next Financial Perspective, its revenue-raising and spending plans for 2007–13. For five member states, including the United Kingdom, the proposals then on the table were unacceptable; others also had problems with them. Discussions on future financing will continue under the UK's presidency. Any new Financial Perspective must at the very least set out a process that leads to a more rational budget, shaping the second half of that perspective up to 2013. We recognise our responsibilities in our EU presidency, and we will work hard to reach agreement on future financing by the end of the year.
	"Second is economic reform. At issue here is not a choice of prosperity or social justice, but rather what combination of policies can best deliver prosperity and social justice in today's European Union. In that context, we will continue to work for more effective European regulation. The EU will launch in October a major new programme to reduce the volume and complexity of EU legislation, in order to ease the burden on business. We will be looking to improve the policy-making process with better consultation and impact assessments.
	"Meanwhile, we will pursue discussions on the services directive. We will continue to work on financial services, and on resolving the difficulties over the Working Time Directive in a way which preserves the freedom of individuals to work the hours that they choose, and maintains the Government's ability to deliver high-quality health and public services. We will also pursue discussions on the review of the EU's sustainable development strategy.
	"The third area is external relations. Over the next six months, we will chair EU summits with India, China, Russia, Ukraine and Canada, and host a summit jointly with Spain marking the 10th anniversary of the Euromed process. We will pursue EU work on key foreign policy issues such as the Middle East peace process, Iran, and EU support for Iraq. The United Kingdom will represent the EU at the United Nations millennium review summit in September, and follow up Europe's welcome new commitments on increasing aid and on developing a stronger action plan on Africa. We will also be pursuing progress on climate change.
	"Freer and fairer world trade offers major benefits, not least to Africa. In the presidency, with the European Commission, we will be steering preparations within the EU for this December's meeting of the World Trade Organisation in Hong Kong. Linked to that objective, we will also aim to conclude the discussions on modernising the EU's sugar regime, an important part of the continuing reform of the common agricultural policy.
	"The fourth area of our work for the presidency is continuing the EU's commitments on enlargement. Bulgaria and Romania signed a joint accession treaty with the EU on 25 April this year, and are scheduled to join in January 2007. Both still have much to do to implement the commitments they have made, and the European Commission will report on their readiness this autumn.
	"Last December, the EU agreed to open accession negotiations with Turkey on 3 October this year, a decision which was reconfirmed by the European Council two weeks ago. Turkish membership of the European Union is a controversial issue for public opinion in parts of Europe, but the British Government remain strongly committed to Turkey joining the EU, and I know that we can draw on the support of honourable Members from all parts of this House. The European Commission yesterday published a draft framework for Turkey's accession negotiations. The EU and Turkey alike stand to gain greatly from a democratic and prospering Turkey anchored in Europe and demonstrating that Islam is compatible with the values of liberal democracy which form the bedrock of the European Union.
	"The EU also stands ready to open negotiations with Croatia, provided that it co-operates fully with the International Criminal Tribunal for the former Yugoslavia. We strongly support the membership aspirations of Croatia and the other countries of the western Balkans, but they must, like all EU applicants, meet the necessary requirements.
	"This White Paper sets out the responsibilities involved in holding the EU presidency and a calendar of the main meetings. At least 12 informal meetings of EU Ministers and many other conferences, meetings and events will be taking place throughout the UK. Today's White Paper, like those before it, is aimed at providing information and material for public and parliamentary debate on EU issues. The House will, as usual, have regular opportunities throughout our Presidency to discuss the European Union and the Government's position".
	My Lords, that concludes the Statement.

Lord Howell of Guildford: My Lords, I am grateful to the Minister for repeating the Statement. I am sure that he will understand that, as the White Paper is a 27-page detailed document with a five-page glossary necessary to explain all its jargon, one has not had as much time as one would like to study it. Indeed, we have had only an hour or so.
	It is nothing personal about the Minister—I have to give him my view—but the White Paper is not welcome to us, because it is riddled with fallacies. I regard it as deeply disappointing at a time of golden opportunity and vast importance for the future of Europe. Of course there are bound to be things in it on which we very much want progress, such as the services directive and the financial services directive. Until that comes about, the EU is very far from completing the single market that we want. We welcome the enlargement process going forward as it should; I totally support the words that the Minister and the Foreign Secretary uttered about the accession of Turkey. However, the period is so long that the EU will be a changed and transformed body by the time that Turkey joins.
	The flawed thinking begins in the Foreign Secretary's introduction, in which he starts by talking about the EU "levering up" Africa's living standards. Everyone knows that the main impulses for prosperity are internal to each country. The IMF warned us this very morning on the basis of detailed studies that aid does not boost growth. That is not the way forward at all. The Foreign Secretary goes on to assert that "Europe can deliver prosperity". The EU has delivered many things, some of which are valuable, but at the moment it is certainly not delivering prosperity. Instead it has delivered 20 million people unemployed and virtual economic stagnation, at least in large parts of it, although not all—certainly not Spain, the United Kingdom or Ireland.
	I turn to the detail of the White Paper. It talks about future financing, which of course means paying for the EU's activities and whether we lose our rebate. Frankly, I am still not clear what the Government will give on that front and in exchange for what. I would have thought that a more vigorous approach in the White Paper would be to start by analysing all the activities of the EU that are recognised as overcentralised, and asking which could be unravelled, repatriated and decentralised. The White Paper talks of "better" regulation but not less or much less regulation, as it should do. Many of us know that, in the world of bureaucracy, "better" often means "worse".
	The White Paper speaks of strengthening the partnership with the United States, but the partnership is in very poor shape. Many EU attitudes and policies have made it worse. It talks of ratification of the constitution and states,
	"that the ratification process in different member states could be adapted . . . according to member states' circumstances".
	Surely we know our own circumstances. That may be a decision of the EU Council overall, but cannot we have a firm line on whether we are to go to a referendum or drop the whole thing?
	On page 9, we come to the Lisbon process, which was going to transform the EU economy. Of course it is a complete fallacy to think that a central initiative from on high can transform what goes on inside our separate nation states. The Lisbon process has been refocused countless times. Why does the White Paper think that it will be any better in future when the whole approach is obviously wrong?
	The working time directive gets a mention but, as it is a direct attack on workers' freedoms, why is not more vigorously resisted? The stability and growth pact has been reformed to the point of meaninglessness, but the White Paper feebly says that it hopes to see it made effective, which it can never be. The White Paper speaks of education and lifelong learning, which are immensely valuable. However, why do they have to be settled at the remote EU level? What do nutrition and health foods have to do with the Union?
	The reform of the common agricultural policy is mentioned and on the agenda, but there is miserably little—virtually nothing at all—on the common fisheries policy. Paragraph 57 on development overseas is unintelligible jargon. It does not seem to be grasped in the White Paper that EU aid programmes have been repeatedly assessed as weak and ineffective, and that major overhaul is needed with repatriation of a large part of them.
	On the external side, there is a weak mention of "pressure on Zimbabwe", with no specifics at all. We all know what that means. There is mention of "strengthening cooperation with NATO", but why was it ever weakened? On Iran, the drafters do not seem to be aware of what is happening there and why we need to work closely with Russia to grapple with the new Iran, under its new and fierce leader. On China, a "review is promised" of the ill-conceived idea to lift the arms embargo. What should be promised is that the whole idea should be dropped for the time being, before it increases tensions in Asia.
	In his speech to the European Parliament, the Prime Minister said that we should go forward, not by trading insults or presenting the issue as for or against Europe and that there was time for a reality check. I would say to him, "Well, join the club". Many of us have argued that for a long time. If, as the Foreign Secretary stated at the end of the Statement that Britain's aim for Europe was,
	"shaping its future direction in our interests and those of the European Union as a whole",
	all that I can say is that infinitely more vigour and creativity is required in the whole approach if we are to achieve any of those aims in Europe's interests—or in our own.

Lord Wallace of Saltaire: My Lords, we on these Benches welcome the White Paper and the Government Statement—which is rather a different tone from that of my colleague on the Conservative Front Bench. Indeed, we also welcome the different tone that the British Government are now adopting towards the future of the European Union as a whole. We welcomed the Prime Minister's speech to the European Parliament and I am aware, from the members of the European Parliament's external relations committee, who I met this morning, that it received a good welcome across the different political groups within the European Parliament.
	We on these Benches hope that the Government will manage to maintain that tone throughout the presidency. I particularly like the phrase,
	"giving our own views strongly but fully respectful of the views of others".
	That is not something that some members of the current Government have found it easy to maintain throughout the past eight years. There is a tendency, not just for this Government, but for all British Governments, when addressing members of other governments within the European Union, to adopt the tone that one usually adopts on attacking the Opposition in the House of Commons—"you are wrong and we are right and we are now going to tell you why we are right". I trust that this presidency will manage to listen and to persuade rather more.
	In particular, I personally welcome the presidency logo. The first occasion that the image of flying birds was used to express a diverse European Union was, as the Minister may know, in a report to the Dutch Government by Helen and William Wallace some years ago. I regret that the British Government decided that swans were more appropriate than geese. Our research into that suggested that geese share the leadership of the gaggle more effectively than swans. But, never mind—I look forward to the presidency tie.
	In both the Statement and the White Paper we regret that there is insufficient reference to using the presidency as an opportunity to educate the domestic public. This Government's greatest failure over the past eight years has been their failure to make an intelligent and persuasive case for closer European co-operation at home. We very much hope that in the short six months, the second half of the year, that the British Government have, Ministers will make the case for more constructive co-operation, not only on the continent, but around Britain in different British cities.
	We strongly support the Government's view on future financing that the Community budget should support future issues—research and development and external relations—much more than agreements of the dim and distant past, when only President Chirac was in government.
	We support the Lisbon agenda for economic reform. I was surprised to hear what the noble Lord, Lord Howell of Guildford, said about that, because it is precisely an attempt not to decide everything in Brussels, but to have governments moving together without centralised regulation towards an agreed agenda for economic reform.
	We also strongly support the Government's efforts to get away from the arguments that we hear too often in Paris, Luxembourg and sometimes in Brussels that the choice is between a single European social model and Anglo-Saxon, free-market capitalism. There is no single European social model. We do not recognise that the British economy represents free-market capitalism similar to that of the United States and we trust that Ministers will continue to argue that we have a diversity of socio-economic models across an EU 25 and that we all need to learn from each other.
	Perhaps I may make one point regarding European security and defence policy, which is loosely and briefly covered in this paper. I am struck by the positive role that the British Government are playing in strengthening European security and defence policy and how little they tell their Parliament or domestic public about it. I met some officials from the Swedish ministry of defence last weekend, who told me how useful the British Government were being in contributing to the development of a Nordic battle group. Why do the Government not tell us that? Why do they not tell us about the useful contribution that we are making in so many ways?
	Lastly, we strongly support the pursuit of enlargement with conditions as the only way forward for the western Balkans and the pursuit of negotiations with Turkey. But we also support yesterday's comments by Commissioner Olli Rehn that we must think about neighbourhood policy, how much further enlargement might go and reopen the debate about privileged partnerships with the countries of the western former Soviet Union as well as looking at how much further the Euro-Mediterranean partnership can go.

Lord Triesman: My Lords, I am grateful to both noble Lords for their immediate response to a document which we have all read over the past hours, rather than a longer period. None the less, it should be possible to deal with the substantive issues that were raised. The noble Lord, Lord Howell, will not be surprised to hear that I cannot agree with a significant proportion of his comments. Equally, my position is a good deal closer to that of the noble Lord, Lord Wallace.
	Perhaps I may start by making a general point about the style of the work. It would, of course, be quite possible in any White Paper or, indeed, in any presentation that was made by the Government to pick every issue on which we had a scintilla of difference with any other member of the European Union and to present the work of the next six months as being a catalogue through with we would work and with which we would have every disagreement aired, wherever that went, and with the greatest possible vitality. I suspect that that will happen in discussions and private forums as we try to persuade people of our position. But the presidency, surely, cannot be successful if that was the approach we took as a public demeanour in respect of all of our work.
	That is why the Prime Minister was quite right in his comments, when he said that it would not be useful for us all to start by trading insults—I paraphrased that by showing every possible area of disagreement—but, rather, engaging in an open and frank discussion. If one thing is plain to us all, it is that an open and frank discussion is now vital across Europe, not least because the people of Europe have told us in two referenda and opinion polling that that is precisely what they demand of us—and they are entitled to have a positive response.
	I turn to some of the points that the two noble Lords made. First, I entirely understand the point that aid is not the answer to growth in Africa. Critically, aid provides a stable basis whereby countries are not using the whole of their national wealth, or significant parts of it, to repay longstanding debts and to make it impossible for them to emerge into a world in which they can trade. Trade will do far more than aid, but if we cannot get off that basic platform of despair, there is no point in talking about the rest. That is why the G8 nations and the EU have come to that view, some with a good deal of persuasion.
	I take the point, in part, that Europe has not delivered prosperity and that there are 20 million people unemployed, which is a devastating number of people to be without work. That is true, but as we look across the economies of the enlarged Europe, it is also true that many of those economies were scarcely economies in any realistic sense and did not operate in any realistic way. The economies of Europe before the accession countries came in began to create the kinds of wealth that will reduce unemployment and increase prosperity and there is every reason to believe that they will continue to do so. But that means being a dynamic economy, not one rooted in the past. I think the noble Lord, Lord Wallace, made that point very effectively.
	I do not think that we are in an ambiguous position on the rebate. We will insist on retaining our rebate. That is just a simple matter of fact, stated as simply as that. Any discussion about the future must plainly take account of the common agricultural policy and of the other ways in which the European Union economy is, in effect, mismanaged. Those are bound to be considerations. We will retain our rebate unless there is something equivalent in worth to the British people. We are already the second largest net contributor, despite the rebate.
	On better regulations, I think that they must mean reductions in regulations. I accept that point. I think the House knows that I am a temperamental deregulator. It must mean that and that is what I understand it to mean in the text.
	Relations with the United States are absolutely vital. Work started in the EU/US summit in Washington on 20 June this year, and we have made it clear that we want the EU and the US to work together as partners to resolve a number of global problems. We are doing so in the Middle East peace process, we are working on climate change and we are working on issues involving international terrorism. Those issues are not all driving forward at the same speed, or as fast as we want them to, but there is no question that the relationship is strong and will be stronger under our presidency.
	I know that the House has ventilated the issue of a referendum on many occasions. There will be a referendum if a constitution is proposed and we have to decide on it. But it plainly will not be the constitution that was proposed. That is not conceivable. The idea of putting in front of the people of the United Kingdom a document that has already been rejected and cannot be resurrected would strike them as bizarre, not just because of the waste of money but because they would wonder what on earth they were being asked to vote on. It would make no sense.
	I agree with the noble Lord, Lord Wallace, on the Lisbon process. I say, with respect, to the noble Lord, Lord Howell, that the intention is to have a great deal of devolution. But in a single market for labour, there needs to be some degree of co-ordination. I shall choose a brief example. If qualifications are to be portable, people will want to know that someone who arrives from another country with a qualification in the area of new technology is as capable of doing the job as somebody who attained their qualification in the United Kingdom. These kinds of improvements are sensible because we all need to operate that part of the market sensibly.
	On nutrition and health foods, noble Lords on the Conservative Benches have repeatedly asked the Government to ensure that good labelling tells us what we are taking and whether it is any good for us. Well, that needs some work, and that work has to be done. I have agreed with noble Lords when they have made that point.
	We have discussed NATO and full commitment on a number of occasions.
	The noble Lord, Lord Wallace, must be right. There is a persuasive case to be made for Europe and we should be out making it. We should try to get it argued in rational terms. We have certainly got to focus people on the budget of the future, rather than on that of the past. We must dissuade people from seeing social models as being identical across Europe, rather than richly textured. We must argue that. We must say positive things about the security and defence roles, and we must argue the case for enlargement so that people are not scared of those who are coming in, so long as they meet the conditions to which we are all committed.
	On the other matters raised by the noble Lord, I am not sure that I am an expert. I know little about the habits of swans and geese, and I intend that that shall remain the case.

Lord Clinton-Davis: My Lords, does my noble friend agree that if we were to follow the advice of the noble Lord, Lord Howell, based as it is on pessimism, there would be no hope for the European project and everything would be doomed? Is it not better, therefore, to have a sensible appraisal of where the European Union stands today, rather than follow the advice that we have heard? Is it not time to renew the idealism that marked the Europe of old when it started on its course as the European Union?
	Does my noble friend agree that the negotiations on Turkey are enormously difficult? They have already met with hostility in France and Holland. How does he suggest that the arrangements outlined in the White Paper can be advanced? Finally, on the service directive and the working time directive, is it not right that we should be able to concentrate on those two issues with absolute optimism?

Lord Triesman: My Lords, I thank my noble friend for those questions. I share the view that optimism is very unlikely to create the circumstances for an effective and successful presidency. I think that, too often in this country, we set up false arguments about the nature of the European project and what can be achieved. In some ways, it probably strikes others in Europe as curious that we accuse them of setting up false dichotomies—for example, between a totally free market and some version of a social Europe—and say that those terms of debate are not realistic. We are inclined to have that debate in a rather false way ourselves and it is not helpful to frame it in those terms.
	The EU agreed in December to begin talks on Turkish membership on 3 October. We intend to deliver on that commitment. We have a strong intention to launch the negotiations. Given attitudes across Europe, I do not pretend that they will be easy. My right honourable friend the Foreign Secretary said that in his Statement, which I repeated. However, the prospect of EU membership has already brought about some fundamental transformations in Turkey which we wish to see continue in the interests of democracy and good human rights developments. But what a big prize it will be if a country with a relatively secular but Muslim population were to feel as much at home in a modern Europe as we do.
	I am also optimistic on the working time directive. There is no reason why people should not have the choice to work as they choose and to engage in overtime if they so choose, so long as we can protect fundamental services, not least in medicine.

Lord Tebbit: My Lords, is the Minister aware that he has now created even more confusion than existed previously over the Government's position on the constitution? He has introduced a new concept—that the old one is no use, although the presidency statement says that countries will be encouraged to go forward in their own national ways with the ratification process, and there is no point in asking us, the British, to express our views on the constitution because it is bound to be a different one when it arrives.
	Is the Minister aware that President Chirac has the advantage of knowing the views of the French people on the constitution? How will the Prime Minister know the views of the British people on the constitution unless we have a referendum on it as it now stands? Will he divine that from a consultation on the sofa in No. 10 from which even the Cabinet let alone the British people are excluded? Or is he going to ask the British people?
	Is the Minister further aware that President Chirac has promised the French people a referendum on the question of the admission of any future members to the European Union? Will the Government follow suit, or are we to conclude that France is a more democratic and open country than this one?

Lord Triesman: My Lords, I shall make no commitments to further referenda on any of the matters the noble Lord has raised. Those are not issues which I think delineate between the quality of French democracy and the United Kingdom's democracy. I have never heard it said that our Parliament is not able to consider fundamental matters and to do so in accordance with democratic practice in this country.
	I turn to the point about the constitution. I hope I have cast no further confusion on it. The Government's position has been very straightforward. If there is a constitution on which a decision has to be taken, the people of the United Kingdom will vote in a referendum on that and they will determine the matter. But we are currently in a position where the specific wording has been rejected by two founder members.
	I can confirm, as I am sure the House knows, that other nations have already decided that they will not have referenda on the same basis of that constitution because it would mean little. The Danes cancelled their constitutional referendum planned for 17 September; and the Portuguese and Polish governments have indicated that they will not be holding referenda which they planned for the autumn of this year. Of course the critical test is to have a referendum on a constitution which you believe will change the operational functions of the political and financial institutions of your own country. Why would we hold a referendum on something we know will have to be modified because the French and Dutch have already decided it will be?

Lord Dykes: My Lords, in recent days the Government seem to have modified their views on the common agricultural policy from saying "may be reducing generally" to "redirecting payments mainly to the new accession states". Yesterday the Prime Minister used the words "get rid" of the common agricultural policy. Which is it?

Lord Triesman: My Lords, I preface my answer by saying that we already make substantial contributions to the accession states. I made the point that we are the second largest net contributor to the budget—aside from the rebate. The common agricultural policy and a number of the other financial institutions which deal with the movement of funds from the centre to the developing areas in Europe must be overhauled—root and branch. That is absolutely plain.
	When we look at the aid questions raised by the noble Lord, Lord Howell, we see what must strike most people as an utterly bizarre phenomenon—that we are prepared to pay many hundreds of times more for the sustenance of each cow in Europe than we are prepared to do to try to sustain the life of each child in Africa. These are fundamental changes. The provisions have to be overhauled root and branch. The Prime Minister also made it clear in his statement to the European Parliament that some attention would have to be paid to the agricultural sector in Europe. How could it be otherwise? It is an important sector.

Baroness Symons of Vernham Dean: My Lords, I thought that the Minister described with absolute clarity the position over the constitution. I cannot imagine anything more likely to enrage the British public than spending tens of millions of pounds on a referendum on something which we are all aware is no longer on the table.
	Perhaps I may turn to more specific points raised. The noble Lord may not be able to answer these questions. If not, I should be very happy to receive a letter from him. We have touched on the question of Turkey's accession. In October, will the British Government be arguing strongly for a negotiating mandate with full membership for Turkey and not about some sort of privileged relationship for Turkey with the European Union?
	Secondly, paragraph 46 of the White Paper touches on the ACP countries and on the modifications announced on 22 June in relation to the sugar protocol. I am sure that the noble Lord will know from his work in the department that those modifications have caused a certain amount of consternation, not least in the Caribbean. What modifications may be made in order to allow the countries that rely on their sugar industry to adjust to the new specifications, as they were put forward on 22 June, in particular for building their capacity to find alternative markets for their products?
	Lastly, I return to the question of the common agricultural policy. I think that we would all agree that spending 40 per cent of the EU budget, as put forward by the constituent countries, on an industry that supports 5 per cent of the population and 2 per cent of the production is not sustainable within the European Union and is certainly not sustainable in terms of the WTO negotiating mandate. What is the strength of the Government's commitment to ensure that, whatever else happens in these negotiations, they do not step back from forcing our European partners to confront the appalling state of the common agricultural policy and its impact on less developed countries?

Lord Triesman: My Lords, I thank my noble friend for her questions and the points that are obviously intrinsic to those questions. The intention, as I understand it, is to conduct discussions with Turkey on the basis of full membership. I know that there is a good deal of work still to be done on how that negotiation will take place. As we have the presidency we will obviously need to listen to what partners in the EU are saying. That is where we have started from and, as I understand it, we have not moved from that.
	On the second question about the sugar regime, I was able, together with my right honourable friend the Prime Minister, to have a discussion two weeks ago with the Prime Minister of Jamaica, Mr Patterson, on the likely impact of the regime on Jamaica's economy. I know that this will be a problem across the Caribbean. The reality is that sugar is a large part of the economies of many places and that fundamental changes that sweep aside all the arrangements could be devastating if alternatives are not in place.
	For those reasons our intention is to negotiate to ensure that the reform described in the White Paper is timely—what we have called in this House before asymmetry—and that there are acceptable transitional arrangements which allow African, Caribbean and the Pacific group of countries to adjust to the reform. We want to make sure that there is a rise in other exports; that there is a rise in tourism; and that there is diversification in those economies. We are working with them as partners to identify what those economic activities might be and how we may help them to the maximum extent.
	I do not believe that we will be stepping back on the common agricultural policy. It cannot be sustained. The truth of the matter is that the common agricultural policy is among the most fundamental reforms we are asking people to discuss. In a way it has for me, and I believe for others, a slightly emblematic quality. If we cannot get reform on something so manifestly absurd, what prospects would there be for reform elsewhere? We must make that achievement.

Lord King of Bridgwater: My Lords, these documents take some time to prepare and I had assumed that the drafts for this document were circulating some time before the referendums were held in France and in Holland. I could not help wondering how different this document is and whether it does not in some part reinforce the impression among the public that it is business as usual, notwithstanding the French and the Dutch referendums—leaving out, of course, the foreword by the Foreign Secretary and the addendum of the Prime Minister's speech to the European Parliament.
	On the referendum issue, is there not really some agreement between my noble friend Lord Tebbit and the Minister? Although people hold different views on the matter, no one is in much doubt what the answer would have been. That is why it is important that, in this presidency, instead of giving the impression of business as usual, the Government recognise that the constitution was rejected—it was rejected in France and in Holland and it would have been rejected undoubtedly and probably most decisively if we had had a referendum in this country—and that a new direction is needed. It is absolutely essential, albeit given the short notice the Government had having just taken over the presidency, that they reflect that in their presidency.

Lord Triesman: My Lords, one of the things that the Prime Minister said in his speech in Europe last week was that if one thing is plain about Europe, it is that it is not business as usual. As noble Lords will see, he used that phrase. The reforms are bound to be fundamental. In a way, that brings us to the difference between the two Front Benches: the question of how you get a discussion that is respectful of other views but in which you are trying to bring other people toward you. Either you have a pretty unsavoury assault on their position before you start or you try to use the arts of persuasion to bring as many people to your position as possible. What use would an attempt at reform be if all we did was antagonise people on week one so that discussion ran into the sand thereafter? That is why our approach is right.
	It is reasonable enough for the noble Lord to say that the outcome of a referendum might well have been the same as elsewhere. That is always a matter of speculation, and I am just speculating, but during the course of this presidency, if we are to achieve the kind of discussion and reform that we really want, there will be fundamentally different things for the people of the United Kingdom to consider at the end of the presidency than there are at its beginning. Otherwise, Europe will continue to be in many of the dilemmas that it is in today.

Lord Dubs: My Lords, although I appreciate that it is not within the Government's power at this stage to influence, six months seems a ludicrously short period of time for which to hold the presidency given the many initiatives, which I welcome, about which my noble friend spoke.
	I especially welcome what he said about enlargement. Perhaps I can press him further about those countries on the eastern borders of what will be the EU once Romania and Bulgaria join—countries such as Georgia and Moldova. I wonder whether, under the British presidency, we could not make a more positive gesture towards those countries in both closer relationships with the EU and more support for their political and social development. Those countries fear that, given the results of the referenda in France and the Netherlands, their opportunity to get closer to the EU has been somewhat stalled. A positive gesture under the British presidency would be enormously helpful to those countries and the EU.

Lord Triesman: My Lords, I think that there will be a continued effort to try to stabilise relationships and talk positively with the neighbour countries. There is bound to be a pretty rigorous debate in Europe in the coming period, not just the next six months, about how far Europe goes or what Europe is. That is a moot point. I am not sure that the Eurovision Song Contest is a guide to that, but that seems to extend further and further east.
	We have a very big task in relation to Romania, Bulgaria and Turkey; we have a large task in relation to Croatia. I should like to think that we will perform all of those thoroughly while ensuring that we continue to talk to neighbours beyond them. Overreach and trying to do things too rapidly may do a disservice to the negotiations that we have promised. That is not a negative comment; but we must achieve the right balance.

Lord Chan: My Lords, during the next presidency, will we press the EU to look further afield with regard to trade, especially free-trade agreements with friendly countries in south-east Asia, such as Malaysia and Singapore, to counterbalance the growing status of China?

Lord Triesman: My Lords, discussions on trade with countries such as Singapore continue all the time. I know that my honourable friend Ian Pearson is engaged on them from day to day. But I am bound to say that when we consider the emergence of some countries—China is as good an example as the noble Lord could have chosen, although he could have chosen India or, increasingly, Brazil—we see the development of giants in the world economy. It is probably just good sense to ensure that we work closely with them, not only because we want trade with them to develop but because it gives us access to raise some of the human rights issues that people in a proper relationship should raise with one another.

Lord Lea of Crondall: My Lords, arising from paragraph 75, which sets out the presidency's major responsibility for bringing to fruition the,
	"long-term strategy for EU/Africa relations, in the light of the Millennium Review Summit",
	the communiqué from the summit made it clear that it is not just a question of advocating more aid, as was inferred by the noble Lord, Lord Howell, but a challenging agenda for the countries of Africa. Will the Government find an appropriate means to keep relevant committees and the House as a whole informed of progress on that major strategic review—perhaps in October?

Lord Triesman: My Lords, we most certainly will; I am happy to confirm that we can do that. My noble friend is right to emphasise the importance of paragraph 75. The aid elements in it are important, but he is right to say that it goes much further than that. I know that my right honourable friend the Foreign Secretary has written to Mr Barroso welcoming the agreement on the ODA and GNI targets and pressing him to advance his proposals for a strategy on Africa, which he will do by October. We now need to build momentum around those matters. I want to keep the House fully and thoroughly involved in that discussion.

Lord Truscott: My Lords—

Noble Lords: Time!

Decentralisation

Lord Kirkwood of Kirkhope: My Lords, I am very pleased to be here, and to follow the distinguished contribution from the noble Lord, Lord Chan, whose reputation as someone who has spent much of his professional life in community life precedes him. He made an excellent and important speech. He made two points in particular. He is right that good policy is essential but that if it is not implemented properly at a local level, that vitiates any of its value. He also rightly stressed the role of pharmacists—community pharmacists in particular—as a pharmacist myself I was especially pleased to hear him say that. I am sure that his contribution will repay careful study by your Lordships.
	I am also pleased to be here because I am one of three Whips being introduced and making maiden speeches today. There must be something in the subject that attracts three Chief Whips at the same time. I do not know what is the collective noun for Chief Whips—

Lord Newby: A conspiracy.

Lord Kirkwood of Kirkhope: I will settle for conspiracy.
	Someone said to me just after I was introduced to this distinguished House that I had already made a name for myself because I had more "k"s in my name than anyone else and I was asked if I was a member of the Klu Klux Klan. I have never been a member of the Klu Klux Klan, but I was a Chief Whip, which is not quite the same thing. The three of us spent many happy years in the other place ordering people to come to London quickly. It is interesting that today we are debating the need to get out of London and decentralise the governance of the United Kingdom.
	I enjoyed the speech of the noble Lord, Lord Foster. I previously sat at his feet and learnt the black arts and look forward to continuing to do that in future. I am especially happy that the Government have provided a Minister with whom I have a relationship, because when I arrived as a green rookie as a researcher, the noble Baroness was a distinguished member of the Library service and kept putting me right with enormous—consummate—charm. I suspect that she may continue to do that later. I look forward to listening to what she has to say.
	It is a quintessentially British process: the metamorphosis from having been a green legislative caterpillar in the House of Commons to a red legislative moth here in the House of Peers. I am not yet a butterfly, because I have to learn the Companion to the Standing Orders before I can fly properly. I have been told that, but I think that I will need at least an 11-week recess and at least two Italian beaches before I have any real prospect of understanding self-regulation, which completely baffles me.
	But I am here and am delighted to be here. It is a fascinating and daunting process and was pleasurable right up until now, but I suppose that this is where the work starts, so I had better turn to the subject of the debate.
	People who make maiden speeches make a point of recognising the role of the staff and how helpful they are in the introductory process. I absolutely concur with that view. It is not just a question of friendliness; you can tell when you come into an institution whether it is working well—at least, I feel I can—and this is a happy place where people work well together. They may have differences but there are perfectly adequate, grown-up ways of accommodating them without rancour.
	The staff play a core part in that. I have been helped: with great charm I was dug out of a broom cupboard when I was confidently expecting to arrive in the Royal Gallery. I was redirected to Central Lobby—of course I was not lost; nobody gets lost—by staff who were patience personified. They were delightful; we must not forget the contribution that they make. They make that contribution because they believe that the institution is important. That is why they get up in the morning and willingly come into work. They should never be taken for granted. It is very hard to strike the balance between being open and friendly and being efficient and professional, but it has been achieved here. None of us who serves in this House should take that for granted.
	I should confess that I have a fatal effect on institutions. Shortly after I left Cranhill Senior Secondary School, it was bulldozed to the ground. I then went on to Heriot-Watt University pharmacy school, but shortly after I graduated the school was closed. When I asked the department the reason, it said that the quality of the undergraduates was not good enough. I have just left the House of Commons, so goodness knows what will happen to the Mother of Parliaments, but I give it until around Christmas. However, I can reassure noble Lords that I propose to be here for a very long time. My next planned career move is to the great parliament in the sky, so there is no risk involved in my being a Member of your Lordships' House.
	I must confess that, although people told me about the work in this House all the time, I was so busy ordering people around as a Chief Whip that I never got an opportunity fully to understand exactly how much work was done here and how high quality it was. We should do something about that. Perhaps the conspiracy of Chief Whips should get together after the debate and send a message back about how important this place is.
	If I had any doubt about that, it was dispelled when, as part of the osmosis process, my new Chief Whip sent me to listen to a debate on 22 June about European Union development. I had intended to stay for 10 minutes but two hours later I was still there, listening to the noble Lord, Lord Grenfell, who gave a very lucid explanation of his committee's work, followed by the noble Lord, Lord Lawson of Blaby, who talked about the Fontainebleau agreement—I did not agree with it all but it was fascinating—and then the noble and learned Lord, Lord Howe of Aberavon. The noble and learned Lord was heckled with a great deal of discretion and a certain amount of demonstrated displeasure by the noble Baroness herself, Lady Thatcher, who was sitting next to him. It was a great privilege to listen to a grown-up debate about issues facing Europe. The sadness is that not a word of it appeared in public print thereafter.
	I learned from that experience. If it is indicative of the quality of debates in this House, I have a long way to go. It is 21 years since the Fontainebleau agreement was reached; perhaps in 21 years' time I will be able to make a contribution of that quality to this House. Although the debate was a little retro, as you would expect, it was a fascinating occasion, and I look forward to contributing to such debates in future.
	I shall turn very briefly to the subject. The Prime Minister, in a very interesting speech to the European Parliament, talked rightly about whether Europe had lost its connection with the people of Europe. That same question could quite appositely be raised closer to home. The noble Lord, Lord Foster, will probably understand my next point better than the rest of us. I wish to quote from the Prime Minister's speech about reconnecting Europe to the people. He said:
	"It is time to give ourselves a reality check. To receive the wake-up call".
	That is a typical Blair sentence; it contains no subject. He continues:
	"The people are blowing the trumpets round the city walls. Are we listening?".
	Chapter six of Joshua depicts the Canaanites inside Jericho. Joshua is outside with his seven priests, seven trumpets and seven circuits. On the seventh day there is a great shout and the walls fall down. Listen to the next sentence:
	"Have we the political will to go out and meet them so that they regard our leadership as part of the solution not the problem?".
	The noble Lord, Lord Foster of Bishop Auckland, will know that when the walls fell down, Joshua walked in and massacred everybody inside, except Rahab the harlot, who had given a safe house to some of Joshua's spies. If the Prime Minister is taking us into the land of the Canaanites with some of his proposals for Europe, I do not want to go there. In fact, Joshua put the cap on the whole thing by cursing the prospect of anybody rebuilding the walls of Jericho. It is time that some of the new speechwriters in No. 10 were sent back to bible class on Sunday. We would all be the better for it.
	I am pleased that this debate has taken place because it is quintessentially important. Simplification and decentralisation must be mainstreamed, in every sense, throughout government policy, across government departments. I have the privilege of serving as a director and trustee of one of the Rowntree trusts. We were so concerned about the disconnection between the electorate and the governance of the United Kingdom that we set up an inquiry, which we were lucky to get the noble Baroness, Lady Kennedy of The Shaws, to chair. We look forward to the result of that inquiry early in 2006, because it will make a contribution. I hope that the Government will take proper notice of it.
	I welcome the debate; it is on an important subject. During my 20 years as a constituency Member in the other place, rural south-east Scotland suffered a salami-slicing reduction in public services in all sorts of ways. It is important that we turn our attention to putting that right.
	As noble Lords may recall, Woody Allen said that 80 per cent of success is showing up. As I showed up this morning, I hope that I can claim eight out of 10 for my maiden speech if I promise to work better on the content in future. But I hope that this subject will show up. If it shows up again in this House, I will be very pleased to take part in those debates. More importantly, I hope that it shows up in the Government's priorities in future, because there is almost nothing as important as getting decentralisation and simplification of the governance of the United Kingdom right.

Lord Giddens: My Lords, I congratulate the noble Lord, Lord Kirkwood, on his maiden speech, which was delivered with great verve and humour. I was very pleased that he eventually got round to the topic of the debate. The noble Lord will bring a lot to this House because of his expertise in social policy, education and social welfare and his work with the Rowntree Reform Trust, which he now chairs. I am sorry that we do not have a personal relationship, therefore I cannot speak in any depth from my knowledge of him. But from his speech it is obvious that he is going to be an extremely worthwhile Member of your Lordships' House. I am very happy to welcome him here today and we are very pleased that, agreeing with Woody Allen, he decided to show up.
	I thank the noble Lord, Lord Phillips of Sudbury, for initiating the debate. A good philosophical principle for understanding something is to begin by looking at its opposite. If we want to understand why such an intensive debate about devolution, decentralisation, local autonomy and local democracy is going on around the world, we should start, not from the local village post office, but at the opposite end of the scale, from the impact of globalisation on societies. Globalisation is the pre-eminent fact of our times. It is the defining feature of our epoch. It is much discussed, but it is not always well understand. Globalisation is not simply a single force; it does not move simply in a single direction.
	If I were asked to picture what globalisation is doing to our societies, I would say that you have to see it as a threefold set of influences. Some powers are pulled away from the nation into the global market place; we know that. That is the prime reason for the demise of Keynesian national economic management from about the 1970s onwards. If globalisation pulls away, it also pushes down. It creates new demands for local autonomy, new possibilities for local power and new forms of local cultural identity for which people strive.
	The push-down effect of globalisation is, of course, not always, benign. Most of the serious conflicts going on in the world today are either within nations or across nations, rather than between nations. At the core of globalisation is a new demand for local autonomy and local power.
	If globalisation pulls away and pushes down, it also squeezes sideways. It creates new demands for regional identity and regional power. It creates new forms of region in world society. We need only consider, for example, the importance of Catalonia in the north of Spain to see how important regions are in the new global economy.
	Globalisation also changes even the smallest of localities. Your local post office looks the same, probably, as it did 20 or so years ago. You probably still pass the same kind of forms across the counter, but your local post office is actually at the centre of a global electronic network. Nearly everything that happens once the form is passed across is integrated into an electronic system. So, the local post office is, in many respects, different from what it was a few years before. The functions of the post office have been undercut by electronic mail. Electronic mail is also part of a truly global system of communication that directly affects our own lives, personal identities and localities. Your local village store might look the same as it was, but now it almost certainly has products in it from all round the world. It is probably in competition with the giant supermarket that has been built up the road.
	What applies to localities also applies to cities. I was pleased to hear a remark about the "global city". London has become a global city. What does that mean? It means that London is no longer simply part of the UK. London is in the UK, but it points outwards into the global economy. There is no clearer example of that than the role of the City. It is so important for generating jobs in our society, but it is part of a global financial system. It is not only London that has become a global city; today, all cities, in some sense, are global cities. They are no longer simply part of their hinterland, as it were; they are integrated into a wider system. We have to understand that, when we develop local politics and seek the economic resurgence of an area.
	I disagree with the noble Baroness, Lady Seccombe—I am sorry, I have lost the thread of what I was going to say.

Lord Desai: She has that effect on people.

Lord Giddens: I disagreed with her because, today, regional identity is becoming especially important. Therefore, an agenda for the regions is crucial.
	The Government have recognised since their inception the importance of reacting to globalisation and its complex nature. They have recognised that it presumes devolution. That is why there has been devolution of power to the nations, the introduction of a regional agenda and attempts at devolution in the National Health Service. Empowering local authorities, while making sure that they modernise first, is a crucial part of the Government's agenda.
	Against that background, I shall make four brief comments about regional devolution and identity. First, in the world that I have just sketched—and momentarily forgot about—regional identity and regional power become inescapable. You cannot have strong local power and strong local democracy, unless you also have strong regional identity and regional democratic accountability.
	After the failure of the referendum in the north-east in November 2004, Bernard Jenkin MP gave a speech in which he, rather like the noble Baroness, rejoiced that the regional agenda was, as he put it, dead and that it had been blown out of the water. I think that it creates deep structural problems for our society. You must have an effective regional identity and an effective regional agenda. If you do not have democracy at regional level, you essentially have unaccountable regional power. I have to say that the Government are partly responsible for the situation. It is no good setting up regional assemblies and devolving to regions if you do not give them real power. It was the fact that we had such a half-hearted version of devolution, rather than concern about the addition of another level of bureaucracy, that was the prime reason why voters in that area voted it down. It was a retrograde step for the country.
	Secondly, the idea that one can directly transfer power from the centre to the locality, which seems to be the leitmotiv of resurgent Conservative philosophy, is almost wholly phoney. You cannot transfer power from the centre to the locality because of the nature of the changes that I described. We live in a society in which you must have what political scientists call—I hope that your Lordships will forgive me—"multi-layered governance". Multi-layered governance is an inseparable part of a society struggling to come to terms with globalisation. That means, for example, that, if you want local resurgence, you must get communities to help themselves. Of course, you will want to transform local government to make it more efficient and accountable, and you will want to work with voluntary associations in the area. However, often, that will not be enough. You need forms of partnership between the centre and the localities, and you often need a regional stratum to collaborate with too. For example, if you want to do something about poor neighbourhoods or deprived areas, you will need central government intervention to provide leverage. Often, if you simply transfer power to a locality, you entrench the power of local élites. You might entrench local stasis and entrench precisely the things that you need the centre to help you get rid of.
	Thirdly, as the regional agenda seems to have ground to a halt, cities will become particularly important. Cities are likely to step into the gap, and that will adversely affect rural areas. We must endorse the agenda for the election of city mayors. In this country, it has been a rather fraught affair, but we now have some systematic research—rather than just assertion—from the New Local Government Network, produced in 2004. It shows some interesting results. For example, mayors are, on average, known to 57 per cent of local people, a proportion that rises to 73 per cent in the north-east. That is far more than know traditional council leaders. In the expansion of local democracy, that must be a key plank.
	I agree that some of the leaders have proved controversial. This morning, I looked at the website for Ray Mallon of Middlesbrough. It was very interesting. His was a controversial election, but he is doing interesting things. For example, he says on his website that he does not agree that the idea that resolving problems of crime and anti-social behaviour is best done by putting more police on the streets. He says that you want flexibility, rather than simply more police on the streets. That is interesting.
	Fourthly, you cannot have effective local democracy or local empowerment unless resources are provided. An interesting study of elections across Europe in relation to the economic resources of local communities and municipalities shows that the more economic power a local community has bears a direct correlation to the level of voting in elections. Finland allows the most local economic power and allocates the most resources to local authorities, and it has a very high turnout. It is very interesting that there is an almost complete correlation across Europe.
	In conclusion, that suggests that the Government must bite the bullet and consider transferring further economic power to localities. You cannot have devolution unless you devolve real responsibility.

Lord Tyler: My Lords, I have long been conscious of the differences between your Lordships' House and another place along the Corridor. If I had not, I think that I would have been disabused of this illusion by robust conversations with Members—friends—on all sides of this House since I arrived here.
	However, I think that I have detected one basic similarity between the two Houses of Parliament: pride of place. At the other end, Members constantly and understandably refer to their constituencies. They have to. But in your Lordships' House, on the other hand, the connection seems both more permanent and more deep-seated. Hereditary titles have centuries-old associations with different parts of the United Kingdom. In their wisdom, the legislators responsible for the Life Peerages Act 1958 retained that need for geographical links in our titles. When the complex negotiations in 1998–99 produced the House of Lords Act and the curious hybrid composition which we enjoy today, no one even suggested that modernisation required the severing of that link.
	So, in my view, pride of place is an integral part—the lifeblood—of parliamentary democracy and the lifeblood of our body politic in the United Kingdom. It will therefore come as no surprise to your Lordships that I rejoice in my long connection with the great county of Cornwall, described by Quiller Couch as "The Delectable Duchy". I have been involved there for well over 35 years.
	Some noble Lords will know from visiting Cornwall that it has its own unique character and integrity. Indeed, our border with England—the River Tamar—is much better delineated than that with Scotland and Wales. Our history is of a resilient, highly intelligent people with great ingenuity and enterprise, whose inventive and innovative spirit meant that we were a trading nation, and indeed had the first industrial revolution, long before the rest of the British Isles had escaped extreme insularity. I sometimes remind my English friends that when we were trading with the Phoenicians, they were dancing about in woad.
	So far as I am aware, my only family connection with your Lordships' House is that my ancestor, Sir Jonathan Trelawny, sat here in the 17th century successively as Bishop of Exeter and then Bishop of Winchester. Trelawny was, and is, something of a folk hero to the people of Cornwall. His family had been deeply involved in the life of the county for many generations. However, when he became the symbol of Cornwall's independent spirit, it was because he, in common with the six other bishops, was locked up in the Tower by King James II for resisting the royal decrees which appeared to undermine the Church of England and strengthen suspicions of a Catholic takeover. The King recalled later that, of all the Bishops, my great, great, great, great, great, great, great, great grandfather was "the most saucy".
	The subsequent trial for seditious libel in Westminster Hall, and eventual acquittal by a London jury, were followed with bated breath in Cornwall. Although not then their diocesan bishop, Trelawny's name quickly achieved fame as the county's champion against the interference and domination of a remote authority. The news of his acquittal, on 30 June 1688, was received with peals of church bells, the firing of town cannons and the consumption of a great deal of beer and sack. That was the beginning of the end for King James II. It laid the foundations for the Bill of Rights on which our constitution is so firmly anchored.
	Years later, another remarkable Cornish character, Parson Hawker, in my old constituency of North Cornwall, wrote the national anthem which records these events. The chorus runs:
	"And shall Trelawny live?
	Or shall Trelawny die?
	Here's twenty thousand Cornish men
	Will know the reason why".
	In the 21st century that song is still sung with raucous enthusiasm on many occasions, not least at Twickenham—win or lose.
	That rather lengthy background is intended not just to ensure that your Lordships' House is aware of the arrival of a very modest Cornishman, or indeed to celebrate today's anniversary of the acquittal of the seven bishops, but to demonstrate a number of salient characteristics of our country and the need for our political institutions to reflect and respect them.
	The United Kingdom is blessed with a richness of varied communities, traditions, historical roots and present-day concerns and aspirations. As my noble friend Lord Phillips of Sudbury said earlier, diversity in this comparatively small country is a very important thread. British people identify with areas and communities of widely varying size and significance, from the great City of London to the smallest island or parish. It is something that we should rejoice in and recognise politically. It is not just nostalgia for the tourist trade, but a deep-seated human need that is perhaps even more necessary in a technological era when our lifestyle is so affected by international—indeed, global—concerns. I believe that, psychologically, it is beneficial and extremely important to all of us.
	In the past half century or so, successive governments have sought to standardise and centralise, very often in the interests of quality control, to the point that we now have the most dirigiste administrative system in the whole of Europe. I acknowledge that the road to hell is paved with good intentions. But those good intentions have gone sour in their implementation.
	Meanwhile, as has been said, other countries—notably the former command economies of dictatorships of the Right and the Left, right across the Continent—have decentralised, often, ironically of course, with British advice and British assistance. The most obvious example is that of the Federal Republic of Germany. Meanwhile the limited devolution to Scotland, Wales and, intermittently, Northern Ireland has met some needs and expectations, but merely reinforced others.
	At least some of the current alarming disengagement of the public from the political process, as my noble friend said, and from the parliamentary and local government elections in particular, can be ascribed to that perception of remote control. Alienation is a feature of perceived distance from and influence on decision making.
	Cornwall is just one natural community where history, geography and present-day social integrity seem to be neglected and undermined by our political institutions. The dilution of local government autonomy and obsessive nitpicking by Westminster and Whitehall has reached such a pitch that all noble Lords must realise that it is a feature that is recognised by our neighbours in our own areas.
	As long ago as 1968 I co-authored a little booklet entitled Power to the Provinces. We were responding to the creation of appointed regional economic planning boards, which were modelled more on colonial administrations of our imperial past than on democratic agents of devolution. However, the general approach that we advocated was widely relevant then and is still widely relevant today. In essence, we said that "decisions should be taken as close as possible to the people they affect".
	Years later, that admirable concept was given the rather ugly title of "subsidiarity" by the Major government. But, despite that title, the concept is still extremely valuable and is at the heart of the debate introduced by my noble friend Lord Phillips. That principle holds good for every level of governance. While I personally have no particular grief for the recent demise of the draft EU constitution, to which reference was made earlier, I very much regret that the commitment to greater subsidiarity seems to have died with it.
	Yet there is clearly both an appetite and an opportunity for not only a new commitment, but also a new and more radical programme of devolution. The collapse of the attempts to impose unwieldy regional assemblies, to which reference has been made, which would have mirrored the vast Conservative government regional quangos of yesteryear, and the failure of the attempt to encourage acceptance of elected mayors with centralised powers, has left a vacuum.
	Every level of governance needs to be reassessed in that light. There are lessons, I believe, even for your Lordships' House. In the Second Chamber of Parliament Bill, which I and more prominent Members of both Houses prepared and published earlier this year, we were very careful to protect and enhance the links with every part of the United Kingdom.
	I have worried and written about these matters for many years and I do not pretend that I have reached a definitive conclusion, but I am convinced that our long-suffering citizens and the very health of our parliamentary democracy require a fresh and more energetic initiative to reverse the centralisation of the past half century. Localism does not mean narrow parochialism. Greater local participation need not lead to national disunity. Bureaucracy need not be a dirty word if its application is much more sensitive to local and personal influence.
	There is a moment—just a moment—when the tide turns. I believe that we can catch that incoming tide now. But if we do not, it will not be just "twenty thousand Cornish men" who will want to know the reason why; it will be millions of our fellow citizens from every community throughout the United Kingdom.

Lord Desai: My Lords, around 45 years ago I was writing a PhD dissertation on the world tin economy. I had to immerse myself in the beauties of Cornwall and its economy. But I did not think then that I would have a chance to show off some of that knowledge in paying tribute to the noble Lord, Lord Tyler. Cornwall also had one of the oldest parliaments, the Stannary Parliament, so the noble Lord comes from a distinguished democratic tradition. If anyone has the right to be local, perhaps Cornishmen do above many others.
	The noble Lord has had a distinguished career in another place. He entered it rather prematurely, was ejected, and then had to come back again. I can assure him that this time he can stay. He will not be ejected. My only regret is that he did not take the title of his famous ancestor. We would have loved to have a Lord Trelawny here, but in any case he is very much welcome because he speaks with authority, in particular on this topic.
	I am not a localist at all. I believe that this debate is based on nostalgia, delusion and wishful thinking. Being a Londoner, it is hard to claim that one belongs to a community of 10 million people. I thought to myself, if only I had been lucky enough I could have invented for myself a small rural hamlet far from London. I could then claim that I was deeply fond of it and that I wanted to go back there. I cannot do that because I can claim only Bombay, a city of 25 million people. It just gets worse since having lived in four different countries before I arrived here, it is hard to make a claim to nostalgia.
	When people talk about localism, they speak of a world that no longer exists. The noble Lord, Lord Phillips, almost admitted that when he said that mobility is the enemy of localism. Mobility is here to stay. Each of us, wherever we live, has a network of friends who are not only local, but can be found across the country and across the globe. My best friend may not be my neighbour. My neighbour may be the person whose Leylandii I hate are growing close to my garden. My best friend may live on another continent. Indeed, that often happens. Let us consider the world wide web. On one level it is very centralising because it is a single thing, but on another it is very diffusing and decentralising. It makes possible contacts across the world, and I would rather be accused of cosmopolitanism than of localism.
	There are lots of contradictions here, a major one of which came out in the words of the noble Lord, Lord Phillips. It is the confusion between centralisation and decentralisation and between government and voluntary activity. Very often, we want not actual decentralisation but "destatisation", in the form of wanting far more voluntary activity. As was pointed out earlier, local governance can be as centralising as central governance. We have all heard stories of how horrible and lacking in understanding local authorities can be. So we have a draw a distinction between what it is that we do and do not want.
	It may be, as my noble friend Lord Giddens said, that globalisation takes power away from the nation state, upwards and downwards, and makes the entire notion of government rule slightly obsolete. The 20th century was a period of national governments and Keynesian demand management. We came to look upon national governance as the answer to all problems. Even today, much as people talk about localism and devolution, at least in this country we love uniformity. The slightest divergence in the performance between health authorities leads to complaints of postcode lottery healthcare provision. The slightest divergence in secondary school exam results and outcomes leads to cries of, "Oh, we cannot have that". We love uniformity because we mistake it for equality.
	So if we ever did devolve power I would bet that, as a Londoner, I would pay the price by having to give money to those lovely local people who want to live in rural areas but do not have the tax revenues to afford the kind of lives they want to lead. Thank you, but I would have to fund their localism and I do not know that I am ready to do so. Those who want localism have to be able to tolerate gross inequalities in outcomes. If you love living in Cornwall, you should love living there without railways or electricity and whatever else you do not have and cannot afford. But with devolution the demand for resources immediately goes up. There is a contradiction here. If you really love your local village, whether you drive there in your Jaguar or something else, you should not ask for extra resources. Uniformity of outcomes requires a central revenue distributing authority because no other authority will provide it.
	I am glad that noble Lords on the Liberal Democrat Benches have not talked about local income tax after what happened in the last election. A local income tax would be the most disastrous thing. If you really mean to depend on local income tax, poor communities would be consigned to a very poor existence. So let us stop all this nice sentimentality.
	Money is generated by large agglomerations of economic activity. It is not generated by agriculture, mining or even tourism. It is generated by large agglomerations through economies of scale. It is generated by corporations that are globally well connected, and it is that wealth which affords us the luxury of our rural existence. It is also those large, profit-making organisations which have to be nurtured. They are nurtured by imposing limits on taxation. We have to remember that. Therefore those who want localism must come clean and choose: what will they do without if they want localism? You cannot have localism with a uniform existence.
	Again, I was very surprised that the noble Lord, Lord Phillips, complained—as his party often does—about the election outcome. He was arguing, in principle, for proportional representation but under certain PR arrangements—not all—what happens locally does not matter because only the national aggregate of votes is considered.
	If you argue for a list system—

Noble Lords: No.

Lord Desai: My Lords, just listen to me. Another half sentence and I would have finished what I was going to say. If you argue that seats in Parliament should be allocated according to the proportion of total votes cast nationally, under a list system you would lose the one local connection that the House of Commons has—that is, an MP with a constituency.
	Of course, there are other schemes. I have read them all. But I shall sit down and the noble Lord, Lord Phillips, will tell me what I know.

Lord Phillips of Sudbury: My Lords, I thank the noble Lord for giving way. He provokes too much. The assumption that I am arguing in favour of a list system is about as fallacious as could be. The noble Lord may have heard of the Jenkins commission, established by the Prime Minister. That is nearer the mark.

Lord Desai: My Lords, I did not say that the noble Lord had advocated a list system. I said that the noble Lord had complained about the outcome of the present election and that therefore his party had advocated PR. I was very careful in what I said. I was not born yesterday. I have read the Jenkins report—indeed, I have read much more than the Jenkins report—and I have my own view on PR. But let us not go into that.
	The fact that local votes would be aggregated into a national total neglects locality. The fact that people voting Liberal Democrat choose to live in different localities rather than concentrating in a few has a cost for the Liberal Democrats—they get fewer MPs. Tough luck. If you like localism, suffer the consequences.
	We need to think not so much about localism as such but about how people can live wherever they want to live. But if they choose to live wherever they want to live, they must then consider how much they will depend upon a central fisc. Really and truly spoken, the consequence of localism is a society in which government does not do very much for you; you do a lot more for yourselves and take the consequences.

Lord Shutt of Greetland: My Lords, I am delighted to speak in this debate which was so ably introduced by my noble friend Lord Phillips of Sudbury. The debate calls attention to the case for decentralisation and greater local autonomy. We have heard from three excellent maiden speakers. Whether they are whip-free or whip-less I am not quite certain but, bearing in mind their contributions, I am very pleased that the trumpets shall sound.
	I wish to establish two principles, one of which was mentioned by my noble friend Lord Tyler. First, decisions made in the public domain should be made at the lowest possible level; and, secondly, citizens are entitled to take a view about wherever they live. They should be able to say, "I live here. This is my place. I want to do something about life and conditions here and I want direction about how I should behave in doing so".
	I have prepared one or two notes but, before I go any further, I should say a little in response to the noble Lord, Lord Desai. We on these Benches will have to share out our response to the noble Lord.
	It is five years since I came down to London to enter this place. I do not know much about London but I have found a place to live and I have found that the citizens here are proud of the place. Indeed, they are often proud of the locality within London in which they live, whether it is Kensington, Peckham or wherever. That is a kind of localism. Sometimes I find that I do not understand what people are saying because they have their own language and accents and so on. So the argument put forward by the noble Lord, Lord Desai, that there is nothing local down here in London is a fallacy; a great number of things are local.
	I also disagree with the noble Lord in as much as I believe that any system of organising government and government activity will always require some kind of equalisation. I cannot envisage circumstances where there is not some kind of equalisation with regard to expenditure.
	In an earlier debate in your Lordships' House, I spoke on local matters. I had gotten hold of the minute book of the Halifax Borough Council of 1937. In that book were recorded the kind of activities in which the council was involved, including gas, water, public transport, hospitals and all kinds of other activities that are nowhere near local government today. Of course, promoting that which is local is not necessarily promoting that which is local authority, but local authority is important in the sense of giving leadership to a community.
	I am tempted to talk about 25 of the past 30 years, when I served as a councillor at Calderdale Metropolitan Borough Council, and to share some of my experiences, but I wish to refer to something else.
	In his speech, my noble friend Lord Kirkwood of Kirkhope referred to his involvement with the Rowntree Trust—I hold a similar position as a trustee of the Joseph Rowntree Charitable Trust—and to the POWER inquiry. Parallel with that, the Charitable Trust Democracy Committee, which I chair, has instigated a project entitled "The State of Local Democracy", the purpose of which is to discover how local communities work. It involves detailed research into two fine, free-standing towns—Burnley and Harrogate. The work is being conducted by Stuart Wilks-Heeg and Steve Clayton of the University of Liverpool and it is expected that the research will be published at the end of this year or early next year. So far, a great deal of hard work has been done and several interim papers have been produced. Some of the information that has emerged is worth sharing.
	One of the interesting points in a paper entitled Institutional Mapping is a break-down of what public money is spent in Burnley and what is spent in Harrogate. These figures are difficult to obtain because you are often looking at regional bodies and how much of their share is spent in a particular locality. But the best estimate that we can get is £294 million in Burnley and £380 million in Harrogate.
	On the other hand, of that figure the Burnley Borough Council budget is £15 million and the Harrogate Borough Council budget is £20 million. In other words, both councils account for 5 per cent of the public spend in those localities. Of course they are in two-tier local government areas. If we add the district and county councils together, the figure moves up to 40 per cent in Burnley and 53 per cent in Harrogate. But if you consider how the people in the Burnley council and Harrogate council areas would regard them as their institutions, 5 per cent seems a tiny amount to be controlled by those authorities. The noble Lord, Lord Giddens, mentioned multi-layered governance. As regards governance, it seems to me that one would expect the borough council layer to be a tiny proportion indeed.
	Further draft papers have been produced on public accountability. As regards representation on local and regional quangos, the larger the body the less representative it is. As noble Lords will know, such bodies usually have the word "strategic" in the title. In the paper, there is also reference to participation and consultation. It is interesting to learn that a lot of consultation takes place, but how realistic is it? Someone was interviewed by the team about leisure facilities and consulting young people about them. I read from the draft report:
	"They've had a lot of complaints from young people about the council, who've been consulting on the sports facility, and someone from the Youth Council said 'what is the point in consulting. Everything we've asked for, they've say that they can't afford. So why are they consulting, because we can't have what we want . . . we wanted a climbing wall and we wanted a diving board, but we can't have 'em because they can't afford 'em, (so), they've asked us what we want, we've told them . . . so what is the point in asking us?'"
	Raising expectations that cannot be fulfilled, by what seems to me to be the phoney method of consultation, causes problems. A further draft report has been produced. It is entitled Political participation and local democracy: a comparative audit of local politics in Burnley and Harrogate. I was interested to see the number of members of political parties. In the two constituencies, where from time to time there is some contention, we find that the total number of people in all the parties is 1,760, and the total number in the two towns who are active in those causes, rather than just being armchair members, is 212. I believe that that is far too fragile for democratic life. Does it have some connection with, for example, the fact that at local authority level we are talking of only 5 per cent of the expenditure being dealt with by the borough councils? Does that have some influence on why so few people are involved in real activity?
	These papers will be produced and a document will be available at the end of the year. Finding out how local communities are working today is important work. I trust that, when that work is published, it will assist in pushing forward the localism debate.

Lord Hunt of Chesterton: My Lords, I congratulate the noble Lord, Lord Phillips, on introducing the debate on decentralisation and local autonomy. I want to make one or two analytical, as well as practical, points. I find in my conversations with the noble Lord that he tends to disparage the formal approach, but as he has been known to take tea with a professor of statistics, there is hope for him yet.
	As a private citizen and in my public career over 35 years as a city councillor, a civil servant and a party member, I have seen great progress in the UK in the theory and practice of community involvement in all aspects of life as that affects communities. So I do not share the rather gloomy view expressed by the noble Lord, Lord Phillips, in his opening speech. However, as a former chief executive of the Meteorological Office, I admit that, although there has been considerable improvement in weather forecasts, many people rightly complain that there are now fewer short-range weather forecasts available to the public compared with in the 1970s. I shall refer to that point in a moment.
	My early, na-ve ideas about community action had to be revised when I read Tony Crosland's cautionary words. One might think of him—surprisingly he is not often quoted in this House—as an early sceptic of old Labourism and a far-sighted prophet of many new Labour policies. He pointed out how people neither want to attend endless local meetings, nor do they want their lives to be determined by the small number of activists who like to attend meetings and work on local campaigns. He might not entirely agree with the noble Lord, Lord Shutt, on that point. As everyone knows, people are complicated and one day they can be sceptics about community action and the next day they can be fierce activists if their interests are affected.
	In the UK, anyone who enters public life at any level, including in your Lordships' House, needs to understand the complexity of people's relationships with public affairs and, therefore, one needs broad shoulders, a sense of humour and a philosophical approach. In the 1960s, there used to be an excessively narrow perspective of local community action, based on elected bodies and their delegated quangos. I used to sit on some and often they were ponderous and useless; for example, discussing the frequency of double-decker buses in outlying housing estates provided by a monopolistic transport company—useless and depressing kinds of conversations—or discussions with the conservators of the River Cam who could not influence much about the flow up or downstream.
	Despite the views of the noble Lord, Lord Phillips, on Thatcherism, I believe that transport deregulation has greatly improved local transport. We now have little buses buzzing around those estates. Similarly the privatised water bodies, with an effective regulatory agency, the Environment Agency, have greatly improved the effectiveness and responsiveness of water and sewerage systems in the UK compared with the past.
	More recently, Alan Milburn, an effective cheerleader for new Labour—perhaps not a philosopher—explained in the Times that local action now involves locally-elected bodies, local agencies of central government, local private sector branches and non-governmental community programmes, often supported by the private sector. Of course, there is a great tapestry of overlapping bodies, but that is the British way and seems to be accepted by the Tories, the Liberal Democrats and new Labour—I am not sure about old Labour. In Paris, for example, the parks are run by one or two organisations, whereas in London more than 100 organisations run our parks and I believe we rejoice in that complexity. However, the UK and France both agree that given the complexity of local community action, there needs to be prominent local leadership to help co-ordination, stimulate local involvement and help to provide funds.
	I have a suggestion to make which I acquired from a marvellous article in Le Monde soon after I entered the House in July 2000. Perhaps the House of Lords could follow the French Senate by holding occasional receptions here for mayors and other local leaders, with a rich variety of British food and drink available to motivate their Lordships' attendance. You should have read Le Monde's description of the regional foods available to the French Senate.
	I have a few more serious points to make in relation to policy. Local action needs to be further encouraged to enable communities to deal with natural disasters and climate change. In Holland, local democracy began with polder flood committees. In the UK, we sometimes believe it began with juries, but in Holland it definitely began with flood committees. I have visited villages in China where the local party officials move elderly people upstairs when floods come through the villages on the Pearl River delta, possibly a more useful role than delivering leaflets. Seriously, it is encouraging that there are now many initiatives by local authorities and utilities to help elderly people; for example, insulating their homes and dealing with flood threats.
	I am glad that Mrs Beckett has now taken up the advocacy that local communities should be developing energy policies to reduce carbon emissions. The National Society for Clean Air and Environmental Protection, of which I am honoured to be vice-president, met yesterday. It was very encouraging to see that local authorities are going to move in this direction. With the help of the Foreign Office, we have been co-ordinating with cities in the United States and Germany and I believe that this is an example of very practical action that will have large-scale, global implications.
	Another aspect of the response to these extreme natural events has to be local, as we saw last week in Yorkshire. Robert FitzRoy was born 200 years ago next Tuesday. He was the first head of the Met Office and came to a tragic end. I am sorry that he is no longer here. He is famous for introducing local storm warnings, which can be seen in the ports around the UK. Of course, the warnings were so successful that the people of Cornwall objected, because the shipwrecks of Cornwall provided most of their income. Those were the people in the House of Commons who objected to the storm warnings. Indeed, warnings were actually suppressed for 11 years before they were reintroduced amid public outcry. There will be a commemoration of this event next week at the graveside in Upper Norwood.
	In the UK at the moment forecasts are provided by the media and the internet. There used to be many local met offices, airfields and ports to provide advice to local people. Even in small cities weather is extremely variable and we should have more local micro-systems and weather information stations such as there are in the United States. However, that would require a change in regulations and funding. We should think about that, especially as we may be entering a period of more extreme and variable weather.
	My third point relates to targets, and was mentioned earlier by the noble Baroness, Lady Seccombe. Standardised targets and a national auditing for local services are necessary because they are paid for nationally and people need to be sure that the performance statistics are reliable. We have heard a lot about how that could lead to distortion and how figures are sometimes not presented as honestly and as straightforwardly as they should be. However, as the noble Lord, Lord Giddens, has shown—and I have seen in north Devon and elsewhere—the focus of the Sure Start programme on deprived communities and families could have been initiated only with the aid of very detailed social surveys and performance indicators.
	On the question of whether public servants are more or less straightforward and honest in relation to targets, the noble Lord, Lord Phillips, seemed to imply a general downward drift of standards, people and everything else. I would take a nineteenth-century example. I refer your Lordships to Anthony Trollope's experiences of improving local post office services. He had targets, which he said in his marvellous autobiography that he always met because his staff were sanguine with the numbers. His clerks knew that he wanted "good results". That was in the 1850s. He was also not above using his post office travelling expenses to help his fox-hunting. Businessmen and civil servants are probably the same as they always were.
	My main criticism of the present regime is that the untouchable gatekeepers of the Audit Commission and the National Audit Office are unduly sensitive about public debate on their policies and methods. When I was a civil servant I was not allowed to publish an article on the service's use of statistics until after I had left. As the noble Baroness, Lady Seccombe, pointed out, there needs to be more debate.

Lord Newby: My Lords, I am grateful to the noble Lord, Lord Phillips, for introducing this debate. I wish to speak about local government finance and about regional government in England. So, at least to a certain extent, I constitute the second barrel of the volley against the noble Lord, Lord Desai.
	Where there is agreement on local government finance, it is on the fact that the current system is unsatisfactory. Even if we ignore some of the specific problems associated with the council tax—such as the unsatisfactory banding structure or the anomalies of revaluation—even its best friends could hardly argue that the tax is an adequate foundation on which to base rejuvenated local politics and government. I absolutely agree with the noble Lord, Lord Giddens, that the power to raise revenue is linked inexorably to political power.
	Political power is the key to greater engagement with people. Why should people wish to get involved in local government if they are there largely to implement the will and targets of national government? The kind of person who is happy with that role is different from the kind of independent-minded municipal leader of whom we saw many in the late 19th and early 20th centuries.
	The grim fact is that only 4 per cent of public sector revenue is raised from local taxes. That constitutes only about a quarter of all the revenue spent locally, and it causes a whole raft of problems. The most obvious problem, I suppose, is that if you want to raise an extra 1 per cent of total revenue for your local council, you have to put up the taxes at your disposal by 4 per cent. It becomes very difficult to make significant changes.
	This situation is far from inevitable. In the United Kingdom, until the 1980s, local taxation covered about 60 per cent of local government spending. Elsewhere in Europe and the world the position is very different. In Sweden, for example, 46 per cent of all public sector revenue is raised locally. In France, the figure is 18 per cent and in Germany 13 per cent. Therefore, in Germany, which has one of the lower figures, the amount is still more than three times the UK level.
	The situation has changed to some extent, but whereas here there has been greater centralisation, across much of Europe there has in recent decades been much greater decentralisation. In Italy, for example, during the 1990s, the proportion of revenue raised locally has increased from 15 to 45 per cent. So it is possible to do it. In this matter we have been going against the grain of what other countries have felt made sense.
	What principles should we adopt if we are going to raise more revenue locally? Several should come near the top of the list. First, we should accept as a principle of local government that most funding for local services should be raised locally. That implies that there needs to be more than one local tax. It makes sense that, if one takes the basket of local taxes together, they should be as buoyant as possible. Also, as with national taxation, local taxation and local taxes should be progressive where possible. There does not have to be a great analysis of the council tax to see that it fails on most of those counts.
	What would we do instead? The noble Lord, Lord Desai, has teed me up and I will mention local income tax. There was a moment when he seemed to imply that this is a rash innovation that would be counter-productive in almost every respect. Yet, local income tax has a buoyancy and progressiveness that council tax lacks. It has a greater ease of collection and administration than council tax, and it gives the opportunity for greater local autonomy.
	Most importantly in terms of whether this tax makes any sense, most other countries already do it. In much of Europe, local income tax is a major if not the major source of local income. In parts of Scandinavia, it is almost the only source of local income.
	We spent a long time during the general election discussing local income tax. Although we got into immensely detailed discussions about whether a nurse married to a policeman on median income living in a semi-detached house in Cardiff would be better or worse off, nobody, as far as I am aware, was able to put forward a principled opposition to local income tax that we felt scored a hit against it. I hope that we will continue as a party to advocate local income tax as a principal source of local revenue as a replacement for the council tax.
	The second step that could be taken to broaden the tax base very easily—which at a stroke would increase the proportion of local expenditure raised locally from about a quarter to almost half—would be to re-localise the national non-domestic business rate. The circumstances that led to the nationalisation of the business rate—that is, extreme leftwing Labour councils which were seen to be putting up the business rate and therefore deterring business—are no longer part of the political firmament. Our thinking should reflect that. It would also be perfectly possible to ensure that any increase in local business rates imposed locally was less than, or equal to, any increase in other forms of local income. It would be perfectly possible to decentralise that process, giving local businesses a greater interest in what their councils were up to, and ensuring that there were limits within which that tax could be imposed.
	A third area is, as it were, everything else. In Westminster we have a situation in which half the revenue raised locally comes from traffic fines and charges. I am not sure that that is absolutely the best paradigm—but I do think that local authorities should have greater power to experiment with their relatively modest local revenue-raising sources to bring a diversity and a buoyancy to their revenue. Although that sounds like a relatively large agenda for change, compared with many of the public policy challenges that we face, it should be relatively straightforward to move towards. We on these Benches look forward to the Lyons report, which is coming out later in the year and will offer a chance to make progress on a better system of local government revenue-raising.
	The second issue that I want to raise briefly is the whole question of regional government. Following the loss of the referendum in the north-east, we are in the worst of all worlds. Under the legislation, the Government started moving some powers to a regional level—strategic planning being an obvious example. But there is now no prospect for any sensible form of democratic control of those powers.
	I agree with previous noble Lords who have said that one reason why the referendum failed in the north-east was that not enough powers were being transferred for the proposal to look sensible. The other reason, frequently used and widely believed, is that elected regional government would create a new layer of bureaucracy. In fact, the opposite would be the case. There is a huge layer of regional bureaucracy with tremendous powers. The government officers for the region dispense billions of pounds and are completely unaccountable. If I were still a civil servant, the job that I would really love would be to be in charge of a regional government office because—my word!—the amount of decision-making that you do in that post, with effectively no one controlling you, is absolutely phenomenal. The bureaucracy is there—it is working; it is just that it is not under democratic control. Frankly, it is a sort of hidden scandal of the way in which we do things.
	In the short term, however, it must be accepted that we will not have elected regional assemblies. Certainly, it seems unlikely to happen in this Parliament. But I suggest three things that might begin to improve the situation at regional level.
	First, regional development agencies work quite well, at least in some regions. Just as they have already been given increased powers—for example, in recent times over tourism—there are other things that they should have responsibility over, which would at least increase the degree of regional decision-making. This is a personal view, which I am not sure is necessarily party policy, but I would transfer the relevant functions of the learning and skills councils to regional level. They are regional delivery mechanisms and should be controlled at regional level and not from Coventry.
	Secondly, I would streamline the existing regional functions and somehow bring them together into a single agency overseen by elected councillors. I would also reverse the decision on planning and return strategic planning functions to the county councils. In many ways, those are pretty poor, second-best solutions, but they are probably the best that are obtainable in the short term. In the longer term, we need to be bolder, both in revitalising local government and bringing proper accountability to the already powerful regions.

Lord Griffiths of Burry Port: My Lords, I thank the noble Lord, Lord Phillips, for bringing this debate to the Floor of the House and for allowing us to contribute to an area of life that touches all of us at whatever level. Some noble Lords have spoken in this debate from heights that I cannot hope to command. We have heard three wonderful maiden speeches from three people whose self-assurance, compared with the trepidation that faced me when I made my maiden speech only a few months ago, is positively mind-boggling. But I am delighted to hear the expertise that comes from along the Corridor, and look forward to hearing much more of it in due course.
	I want to address the subject from a much humbler point of view—but I want to start at least by pretending to be intellectual. In the middle of the 18th century, Montesquieu identified the bureaucratic state as the distinctively modern form of despotism. He bemoaned the fact that there seemed to be a drift towards precisely that end point in the national monarchies and nation states of his day. He placed his hope in, of all things, the aristocratic structures of post-feudal societies. For him, moderate government, if we were ever to find it, meant the dispersal of power and the rule of law. As long as landed aristocracies maintained a role in local government, an over-concentration of power in central government could be withstood, according to his theories. His extreme illustration for that point of view was England.
	It seems fitting to ask, in a day when aristocracy is no longer offered that mechanism for the dispersal of power, what alternatives are available to serve the same end. I wish there were more noble Lords here from that class to answer my question, but they have clearly gone to the country. In what mechanisms can we vest the hope that there will be a possibility of withstanding the encroachments of central government? It is not quite enough to be critical of self-government. A great deal more thought, and a fair amount of effort, has to go into identifying or building up those instruments that can affirm local identities and draw from them enough self-confidence to take control of their own affairs and develop the cultural, educational, recreational, social, spiritual and—yes—political dimensions of community life. Others have spoken in this debate about regional assemblies and representative government at various levels.
	My own experience, for the last quarter of a century, is in London—"a wonderful place", said Bob Hope,
	"or at least it will be when it's finished".
	In a sprawling metropolis such as London, the secret is, as the noble Lord, Lord Rogers, once put it, the building up of "knowable communities"—or, as it is more usually put, the development of those villages which, strung together, make up this capital city. To achieve that, people must be enabled to lead decent lives, to bring up their children in security and to conduct themselves with integrity. They need space to be themselves, to think as well as to act, and they need an environment which encourages them to build relationships and to form communities. That will always be best done by collaboration between central and local bodies; it is not enough for either the one or the other to be so mistrustful of the other that collaboration cannot happen between public and private entities. I was delighted in one of the maiden speeches to hear the word subsidiarity—and I would always yoke "solidarity" with subsidiarity, as those are the two key concepts in Catholic social teaching that has been very beneficial across the last century.
	In the inner-city where I live recent examples of help from central government and national bodies include the EC1 New Deal, the Building Schools for the Future initiative and lottery money for the St Luke's Centre, through which wonderful musical programmes in the community are being offered by the London Symphony Orchestra. As it happens we have good health facilities, primary care and NHS dentists. We may not be typical: I merely report, count my luck and wish the same for everyone else.
	These are splendid initiatives but initiatives and resources that come from central government can only be pump priming, enabling injections of resource. The rest will happen only when people on the ground—elected representatives, leaders of cultural associations, members of the professions, of industry and commerce—appropriate, shape and commit to the projects and programmes that will express local aspirations.
	Yesterday I had tea on the Terrace with my local ecumenical colleagues—what a bunch they are. What heroic effort they put into building local communities. My Lutheran colleagues have a fine musical tradition with jazz and baroque music their speciality. My Roman Catholic friends have, with help from the New Deal regeneration fund, turned a car park into a garden—an act of transubstantiation that I can go along with—and it is used by local people. It is an oasis of calm in a very busy spot. My Anglican colleague oversees a brilliant centre that offers a wide variety of services to elderly and lonely people.
	The YMCA stretches out a hand to asylum seekers and single people beginning their working lives in the capital. As for us Methodists, we are heavily involved in local schools; we offer musical recitals; a service to mums and carers with their toddlers; we host a dozen or more not-for-profit organisations for their training and other needs. I could go on. Beyond this ecumenism lies our relationship with other non-Christian faiths. We are in dialogue with them as we seek to serve our communities together.
	We will work with any organisation of good will, for example, from our local pub—Hansard may record the first commendation of a local pub by a Methodist Minister at this point—the Angel in Islington, whose landlord and staff are community workers in their own right. They provide space for conversation, for "chilling out" and generally for the building of relationships. I refer also to local history groups, locally based charities, the symphony orchestra which I mentioned and the Spitalfields Festival, which all come on to our territory.
	I am so grateful to hear the expertise of people who can handle concepts relating to tax regimes, political arrangements and the rest of it, but from my angle of view building communities means encouraging local initiatives, and it takes time. My word of caution to my noble friends in the Government—a plea even—would be to avoid, unless absolutely necessary, unrealistic targets being set for the achievement of community building because that is not how they work. They come together at their own pace. The pressure that comes from inappropriate targets can be, and usually is, very counter-productive.
	My other plea would be to take faith communities more seriously. This is the moment when the "cringe" factor sets in. Yet, in my experience, they are not usually hotbeds of sectarianism at all, or narrowly focused, ideologically driven outfits with heavy programmes committed to proselytisation. In fact, very much the opposite, they offer safe space as well as sacred space. They work with others of good will, not against them. The leaders and others in the faith communities are still there when the lights need putting out, when the money runs out, when the projects are finished and when doctors, social workers and teachers have all gone home. They are there in solidarity with the people. Who knows, Montesquieu might just identify them as the modern day bastion of local people—a necessary check on the relentless march of central power, a substitute, and a worthy one, for the aristocracy.

Baroness Maddock: My Lords, like others who have spoken, I am grateful to my noble friend Lord Phillips for initiating the debate as I am somewhat of an "anorak" when it comes to regional and local government. The debate has provided a good opportunity to hear three excellent maiden speeches.
	I need to declare one or two interests connected with this debate. I am a member of the Committee on Standards in Public Life, which has touched on some of the issues that we have discussed today, and I am a vice-president of the National Housing Federation. Recently I became an elected councillor again. I am now a councillor on Northumberland County Council. For me, life has come full circle as more than 20 years ago I started my political career as a city councillor in Southampton. What is even more amazing is that about two weeks after I was elected, I started to collect my pension.
	I became involved because I cared about the community in which I lived. I particularly cared about the community in which I was bringing up my children. I am probably as passionate about local involvement in community life today as I was then, and possibly even more so because I have seen so much power taken up to the centre in those 20 years.
	Why is local democracy so important? Other speakers touched on that matter. I certainly believe that the health of national democracy depends on the health of local democracy. As others have said, throughout history we in this country have had a very well developed hierarchy based on local communities running their affairs. In earlier days the hierarchy was based on church structures. Many of those structures still exist. In the 19th century we developed strong local government to provide schools, drainage, sewerage, housing, hospitals, and, as time went on, transport, gas and electricity. It was local government that fashioned our towns and city centres. It was local government that built public facilities and many of the buildings that still form the hearts of our towns and cities today.
	Local government is more than the services it provides. That has been reflected in many of the comments today. It is not just an agent for delivering central government policy goals. At its best, it provides a bedrock for pluralism and the basis for civic society to thrive. At its best, local democratic government provides a way for a community to reconcile competing local priorities and determine for itself what mix of services is required. In that regard I do not agree with the noble Lord, Lord Desai, who is not in his place. Open participatory local government enables the democratic voice of a community to be heard on matters that affect that community, and not just the ones it is responsible for.
	Many challenges face us and many of them require local solutions. However, the challenge for Westminster and Whitehall is to let go. That means giving local government the space for local initiative and innovation. Again, those comments have been made by others this afternoon. The combination of democratic legitimacy, service provision and purchasing, along with regulatory powers and the representative role, places local government in a unique position. If the Government are serious about tackling crime and want to promote environmental sustainability and to tackle social exclusion, they need to recognise that those challenges need a bottom-up approach.
	In some areas the Government have recognised that. When I think of this Government and local activity one of the things that comes to mind is Sure Start, which has been mentioned today, and local strategic partnerships. Although I am not critical of the good work that is being done by many of those bodies, I am often concerned about the lack of democratic accountability in so many of these areas. In my own town of Berwick-upon-Tweed I was fairly shocked to discover that the chairman of the local strategic partnership was elected by means of an election carried on through the local newspaper. I do not think that is truly democratic.
	National governments should set out the policies and strategies that they want to see. They should legislate imaginatively in a way that enables regional councils and local councils to carry out those strategies and policies in a way which best reflects local structures. Again, that has been reflected in comments this afternoon.
	In addition, local councils can and do play a vital role in gathering information to enable governments to allocate resources fairly. When I was a Member of another place, I had the opportunity to take a Private Member's Bill through Parliament. The Act that resulted illustrates part of the point that I have just made. I chose to steer through the Home Energy Conservation Act, which gives a duty to each local authority—district and unitary—to assess the energy efficiency of all residential properties—public and private—in its area and produce a strategy containing the measures that are necessary to achieve significant energy savings in homes in the area. The report must also contain an assessment of carbon dioxide emissions, and the measures that could be implemented there, and take into account people's personal circumstances, which was the start of looking at dealing with the fuel poor.
	That is a good example of how local councils can enable the government to get information to target resources for national strategies. In addition, as the Act has progressed, grants have been made available for implementing the plans that came forward, and they have promoted partnership and innovation, which has involved local councils and local businesses, and of course it has helped many local people in need. Unfortunately, the Government could have made a lot more of it, but that is not the debate for today.
	Many of us had high hopes in 1997 of the Blair Government when it came to devolution and democracy. The Liberal Democrats had worked closely with Labour on those issues before it came to power. Initially, all went well, and good progress was made; we have a Parliament in Scotland and an Assembly in Wales. As time has gone on, the Government have become less and less committed to devolution and more and more confused about how to carry out reforms in those areas. Their efforts to set up democratic regional government in England, as the noble Lord, Lord Giddens, said, failed miserably. The proposal for powers to go up from county councils to regional bodies was wrong—that is not what devolution is about. It is about handing power down. There was a lack of clear thinking about where they were going on this and a lack of passion from the Government. If they really believed in regional bodies they should have been more passionate about them and maybe we would have had a better result. We had a damp squib of a referendum in the north-east, and it has probably put back the chance of democratic regional government for a generation, which I very much regret.
	I have written here exactly the same words as my noble friend Lord Newby. We have the worst of all worlds: unelected regional bodies with imposed central targets, particularly in the areas of planning and housing. I was on the Front Bench during the passage of the Planning and Compulsory Purchase Act 2004. While it made some good changes to the system at district level, at county level the substantive planning role has been removed. Where previously counties determined everything from rural conservation to economic development, those functions now fall to government regional offices and unelected regional bodies.
	The Act imposes central targets on the local planning framework to a degree previously unknown in England and completely unheard of in most of Europe. The only concession that we won from the Government as the Bill passed through this House was to make sure that the regional bodies had to consult the county councils. They were allowed to do it if they wanted to under the original legislation.
	There has been widespread criticism and ridicule of the new system. The one criticism that I like best is from the Local Government Association, which describes the results as:
	"Old centralism managed by a regional branch office".
	The Government need to do some serious rethinking about what is going on this area. Other noble Lords have said that today, and my noble friend Lord Newby put forward some ideas. The muddle and confusion have not helped, because people feel disenchanted by the lack of accountability. The level of participation in local elections is low and, as other noble Lords have said, it is extremely difficult to attract councillors to take on the role when so much is dictated from the centre. After all, who wants to get the blame for matters that are really completely beyond their control?
	Everyone finds that difficult. In Northumberland, there are 67 council seats, and even Labour found that it could not stand candidates in 10 seats. Nevertheless, it still runs the council, and councillors have been concerned in our area about the demise of local democracy and the lack of participation. Indeed, they were so concerned that last year they set up an independent Democracy Commission chaired by the writer and broadcaster Eric Robson. It consulted widely in the area and reported back in an excellent document. Many of the recommendations—

Lord Hunt of Chesterton: My Lords, has the noble Baroness considered having fewer councillors, as in the United States?

Baroness Maddock: My Lords, there are areas where we could certainly have fewer councillors, but in this country—I am using up my time here which is sad—we have a high proportion of people to each elected representative. It is much higher than in the rest of Europe.
	Some of the points made by the Democracy Commission were for voting at 16; the single transferable vote for local elections; the strengthening of local committees; the strengthening of the role of town and parish councils; joint meetings between councils to lay out plans. My noble friend Lord Shutt of Greetland made the point that people feel disillusioned when they are consulted and it seems to mean nothing.
	I am conscious of the time, but I want to share with noble Lords the conclusion of the report, which is fitting for the debate that we are having today. It says:
	"Buried in the hundreds of pages of evidence received by the Democracy Commission was a particularly worrying response. A very large number of people simply don't care what happens to local democracy. If you share our view that democracy at local level is one of the foundations of a civilised society, that finding should worry you too".
	I do not have time to read all of it, but it continues:
	"Dismiss this report if you will. But when central government has further eroded the influence of local democracy; when voter turn outs have dropped to levels that completely undermine the legitimacy of local politics and when extremist groups and individuals have filled the vacuum created by inaction and petty rivalry it will be too late to recover this report from the waste paper basket where you filed it".

Baroness Sharp of Guildford: My Lords, I, too, join other noble Lords in thanking my noble friend Lord Phillips of Sudbury for initiating this debate and in saying how much I enjoyed the three excellent maiden speeches today.
	My interest in the issue of localism was stirred in the early 1970s by spending four years in the United States. That was a time when, noble Lords may remember, in this country Sir Keith Joseph was busy getting rid of counties such as Rutland and Middlesex and creating hybrids such as Avon. My friends in the United States were much bemused by that. They said, "How is it that in your country Parliament can destroy entities that have existed for 10 centuries, whereas in this country federal government would not dare touch the boundaries of states, which have existed often for less than one century".
	That is the case. In the United States, states have considerable powers not only to vary legal practices, health services, education services and so forth within the states, but also to raise taxes and to go to the market. It is not only states that have those powers in the United States. It is, as the noble Lord, Lord Giddens, mentioned, a multi-layered democracy. As you go down the layers from states to counties to townships to communities to the local school board—often for a community as small as 3,000 people—each has the right to determine what they wish to do in terms of provision and also to raise taxes and frequently to go to the money market and borrow money. For townships in the United States, there is no guarantee. They have a market rating through Standard & Poor's, and if they have a good credit rating they can borrow money; if they have a bad one, they cannot.
	I was interested in the fiscal federalism that emerged in the United States, and particularly in the vibrant communities that some of it raised—except, of course, in the inner cities. As my noble friend Lord Phillips said, self-help emerges from within. It was when those communities in the inner cities grabbed hold of their own destiny that they began to regenerate themselves. One has seen that in inner-city Baltimore, inner-city Philadelphia and so forth.
	Contrast that fiscal federalism with what I saw emerging when we came back to the United Kingdom, where the pursuit of the public sector borrowing requirement meant that central government began rapidly to dictate not only what should be spent at a local level through the standard spending assessment, but the level of taxes taken at local level through capping. Borrowing was already limited to loans through the Public Works Loan Board; you had to go to the Treasury cap in hand and say, "Please sir, may we borrow this money?". On top of that, the Ryrie rules meant that, even if you got private money to match your public funding, it still fell within the public sector borrowing requirement and required Treasury permission.
	My interest in fiscal federalism was further stimulated by my work at Sussex University on innovation in Europe and, in particular, why rates of innovation varied between different countries. Why had some countries succeeded in developing growth poles, whereas regional policy in Britain had been such a disaster area? The classic examples are Emilia Romagna in Italy and Baden-Wurttemberg in West Germany. The noble Lord, Lord Giddens, has already mentioned Catalonia and Barcelona, and there is Nice and its hinterland around Sophia Antipolis. In the 1990s, why did Ireland emerge as a tiger economy when, in terms of location it was in all respects worse placed than any British region, except perhaps Northern Ireland?
	Part of the answer lay in the degree of autonomy enjoyed by those regions. They had money of their own and could raise money through taxes. They could borrow money from the banks, and did. They linked up with local bankers and businessmen to develop local projects. They used funds available from the European Investment Bank and the European Social Fund to lever more money. They brokered deals with international companies and brought in foreign investment, but backed it up by bringing together their local universities and technical colleges, financing training packages, and promoting the supply-chain links with small and medium-sized businesses. Of course it was cumulative. Success built on success. Computer companies attracted software specialists, semiconductor manufacturers and so forth.
	In the 1990s, Ireland copied all that. It had the benefit of being classed as one of the poorest EU regimes, qualifying for very substantial structural funds. However, it invested in building its capabilities in education and training, expanding its universities and technical colleges, and providing a clear strategic framework within which its businesses could plan. With 3.5 million people, it was smaller in population terms than most British regions, and its location across the sea from Wales put it at a serious disadvantage in terms of access to mainland Europe. Its great advantage, if I might say so, was that it was free of Treasury controls.
	Linking those experiences, I therefore concluded that one secret was the degree of autonomy to take decisions and do one's own thing. The other was always having the right people at the right time with vision and nous to take that vision forward.
	The noble Lord, Lord Giddens, talked about the concept of multi-layered democracy. Britain has traditionally been such a democracy. At the national level, power has been divided not only between the different arms of government—Parliament, the Executive and the judiciary—but always between central and local government. Out of that pluralism comes—or came—diversity. Different local authorities used to go different ways and do different things.
	As noble Lords know, education is the subject on which I speak for my party. In the 1960s, we saw considerable diversity in the provision of education in this country, with areas such as the West Riding of Yorkshire leading the field in terms of innovation. Out of diversity comes innovation. There is experiment. What is seen as best practice is copied. That is the great advantage of pluralism. Let 1,000 flowers bloom, and out of them many good things come.
	That is very different from the current situation. Today in education we have a national curriculum, national tests, national literacy hour and national numeracy hour. That goes down to telling the teacher what they must do in every five minutes of the lesson. The Education Act that we put through this House earlier this year was called by the Local Government Association the "nationalisation of education", because it embraced the total ring-fencing of budgets so far as local education authorities were concerned. There is no discretion about what they may spend on schools.
	I want to quote a speech given by Charles Clarke to the National Social Services Conference in October last year. In it, he said:
	"Ministers are in a position in which they can't be certain that, if they make £x million available, then they will get y outputs and y outcomes in return. So what they have chosen . . . is single purpose bodies with dedicated funding streams, clear accountabilities, bypassing local government rather than working with local government . . . I believe the public expect these services [education and child protection] to be provided as national services which means that local government role is in effect (and I use this word advisably) active agents for central government in relation to these key services".
	The words,
	"active agents for central government in relation to these key services",
	signal what seems to be the final nail in the coffin of local education authorities. In future, they are no more than agents of central government. Indeed, if No. 10 had its way and every school became an academy, defined as an independent state school—if that is not a contradiction in terms—or a foundation school, LEAs would become totally superfluous. Central government would be running some 25,000 schools in this country. We shall have moved a long way from the pluralism which, until the past two decades, characterised the provision of services such as education.
	Does it matter? Yes, it does, because it amounts to a considerable centralisation of power. As the noble Lord, Lord Wilson of Dinton, in an article in the latest edition of the Political Quarterly, stated that,
	"too much power in too few hands as a settled pattern in central government is undesirable in both principle and practice, because it may lead to a decline in the quality of decisions and possibly to the abuse of power".
	I shall summarise my three main points. First, political decentralisation without economic decentralisation is futile. The power to raise and vary taxes is a key to meaningful decentralisation, but so, too, is the power to raise money on capital markets. Clearly, there must be safeguards, such as credit ratings, district auditors and referendums on major projects, but national governments must learn to trust the electors and the markets to make up their own minds on whether projects are worth while. Secondly, decentralisation will and should lead to diversity and, far from running away from diversity and condemning it as "postcode lotteries", we should embrace it as a vital constituent of progress and innovation. Thirdly, as liberals, the message of embracing and, indeed, reinforcing pluralism within the political institutions of this country is vital, for that pluralism is under threat and, with Parliament presently ineffective in limiting the power of the Executive, the danger of an abuse of power at the centre is ever present.

Baroness Falkner of Margravine: My Lords, I, too, join other noble Lords in thanking my noble friend Lord Phillips of Sudbury on providing an opportunity for us to debate these issues which, clearly, we on these Benches hold dear.
	It was also pleasurable to hear the maiden speeches of three former Chief Whips—the noble Lords, Lord Foster of Bishop Auckland, Lord Kirkwood of Kirkhope and Lord Tyler. I must say that that raised some anxiety. I wondered whether this was a back-door method of bringing their promise of more discipline to our House. In the context of Chief Whips, I worked as a researcher under both the noble Lords, Lord Kirkwood and Lord Tyler, at some point when they were Chief Whips and learned much at their feet—not least about Scotland and Cornwall—which, as a foreigner to this country was fascinating. So, I do not think that regional identity will be under threat as long as we have these noble Lords on our Benches.
	In winding up from our Benches, I should also draw attention to the Government's cunning game plan in putting forward Front-Bench spokespeople, such as the noble Baroness, Lady Andrews, and others who speak on foreign affairs, who bring much wisdom and, indeed, charm to their roles. I think that that is to wear us down—but I shall try to remain vigilant.
	In May 2005, the general election was characterised by ever-increasing calls by politicians from all sides for democratic accountability. They spoke in support of local communities, local regeneration and, above all, local control. Did the voters buy those promises for a new localism? If the election results are anything to go by, the answer is a comprehensive "No", with less than a third of votes going to a party that formed the Government and minor improvement in support for the Opposition. Rightly, that has led to calls for more action to reconnect politicians with the people, to re- engage the spirit of civil duty and to re-invigorate communities anew.
	But if voters are cynical about the promises made by politicians, it is because they know from their personal experiences when they go about their daily life that the reality is that power and decision-making have moved away from them, that loss of control is tangible and that "community" is an expression which has little meaning in any everyday sense. People realise that there has been a change in the way that life is lived.
	They know that since 1997 the number of elected councillors has fallen to just over 22,000, but that the army of appointed members of quangos has risen to over 60,000. They know that a third of public expenditure is now spent on consultants, accountants and lawyers, devising and enforcing a culture that is driven by targets and league tables, as many noble Lords have mentioned. For example, in 1997, some 40 per cent of people were dissatisfied with the NHS. That was at a time when medical staff numbers were rising by 4 per cent per year. By 2001, dissatisfaction ratings had risen to over 50 per cent. By then, medical staff numbers were rising by 3 per cent, but the number of administrators in the NHS was rising by 6 per cent. It is not entirely surprising that more and more people think that the NHS is unresponsive to patients' needs. Yet, as the noble Lord, Lord Chan, pointed out with an illustration from Merseyside, targets do not necessarily improve the provision of care.
	The increase in centralisation is not restricted to increases in bureaucracy alone. The ethos of Whitehall is subsumed by a culture of targets. Central government measures what is measurable, not what is important—which is obvious to frontline staff. It is then surprised when there is a mismatch, or a knock-on effect elsewhere. A classic and tragic illustration of this is the spread of hospital-acquired infections, such as MRSA, which was born of a culture of targets replacing clinical judgment and good practice. This is the realisation of Goodhart's Law, which states that any target used as a means of control is bound to be perverted. So we end up in a situation where a hospital that is compelled to cut patients' time on trolleys finds that it can meet its targets to reduce that time by buying super-trolleys that can be designated as mobile beds. The accountant is satisfied, but the patient who is untreated for hours knows that he or she is sold short, whether he or she is lying on a trolley or on a mobile bed.
	To be fair to new Labour, it has not been the master of centralisation from scratch. That job was well embarked upon by successive Conservative governments, as the noble Baroness, Lady Seccombe, so thoughtfully touched upon. We find ourselves in the aftermath of an election observing the familiar sight of the Conservative Party in search of a leader. The inevitable beauty parade is accompanied by the need to become more electable, hence new thinking.
	So where does Tory blue skies thinking lead this time? It leads to the admission—long overdue—that the abolition of local accountability was their creation. It was capped by the totemic symbol of the abolition of the GLA, which left London, alone among the great cities, with no voice of its own. Theirs was a record of decades of centralisation, universal capping, nationalisation of business rates, cutting support grants and establishing the right to buy with centrally determined discounts.
	But we should be grateful that they are talking the talk now. As Mr Douglas Carswell, the new Member for Harwich and one of the authors of a pamphlet entitled Direct Democracy: An Agenda for a New Model Party, puts it:
	"Undoubtedly the abolition of the Greater London Council, the rate-capping, and the imposition of the national curriculum and a lot of tendencies started while the Tories were in office".
	He goes on to say:
	"but they have accelerated since then".
	Hence the newfound conversion to localism, but the new model party will have to do more than just pay lip service to decentralisation.
	As recently as the election, the Conservative spokesman on local government, Caroline Spelman, was dismissing attempts to rethink local government finance, and announcing that they would scrap the revaluation of council tax. Her thinking was along these lines: just because a house has gone up in value, it does not cost any more to empty the bins. Those are not the words of a champion of local government. They are the words of someone happy to undermine local government by perpetuating the myth that all councils do is collect the rubbish.
	The trend to centralise power is accompanied by another social trend, that of social fragmentation. This has been touched upon by many noble Lords. It is unfortunately a trend that is seen across the board, for example, in the increasing fragmentation of communities in rural areas, where the viability of small villages is at risk because local people are obliged to move away when they cannot afford housing. It is also seen in jobs that are filled on a contract basis, in order not to tie an employer to obligations to their workers. The right reverend Prelate the Bishop of Southwell touched on that trend.
	The loss of locality and community is all around us. We live in clone towns where a journey from one high street in one town to a town somewhere else will contain no narrative of where we have come to. Its local architecture, shops and pubs will tell us no story of where we are. This loss of narrative has been creeping upon us for many decades through the growth of large chain stores, the loss of planning powers and through changes in the structures of our lives.
	So when we are told to "act global but think local", we are at a loss to define what local might be. As the noble Lords, Lord Giddens and Lord Griffiths of Burry Port, reminded us, identity is integral to our thinking and to what we mean by "local" and "regional".
	The key to local resurgence is the relationship between the centre and localities. That comes under the greatest tension in the provision of public services. The Government have and are doing much fresh thinking in the area. In our contribution to the debate we would urge them to do less, but to do it better, because the solutions do not lie with central government, but with the people.
	As my noble friend Lady Maddock so passionately pointed out in her description of her experience as a councillor, if central government were to let go, the thing we would urge above all is to free local government to raise more of its own money and to spend it on its local priorities.
	That would involve an acceptance that councils could have variable performance. They do today. The creation of the financial link between the taxpayer and the authority would energise the taxpayer to greater vigilance over spending in his name. There would probably be an increase in voting turnout in local elections, as well as a greater voice for communities. Alongside that there would need to be a reinstatement of a block grant from central government to give truly greater choice at local level. The challenge would be for central government to renounce ring-fencing, which flies in the face of democratic accountability.
	My noble friends Lord Newby and Lady Sharp have both spoken about the need for fiscal federalism. I hope the Government have been listening carefully. That brings me to the issue raised by the noble Lord, Lord Desai. He mentioned the confusion between uniformity and equality. The dilemma for all governments at all times is that of reconciling standards in the provision of services with local variations—what is commonly known as the "postcode lottery".
	While it is entirely appropriate for central government to treat citizens equally in terms of national benefits and social security, they cannot and should not apply that to the provision of services such as education, health and transport. To do so would be to imply that individuals are cast from the same mould. Furthermore, communities are no more cast from the same mould than individuals. There are bound to be different needs and different responses which are appropriate to those needs. Accepting pluralism, as my noble friend Lady Sharp said, means a recognition that central government cannot be sensitive to the needs of every child, every pensioner and every patient.
	So perhaps we need to accept on all sides that our quest for local accountability will mean accepting postcode variation. If it comes with increased local democratic accountability, it may well be a worthy endeavour.
	In concluding, I shall turn to the great liberal, John Maynard Keynes. When describing the establishment of the welfare state that he sought to create, he described a system where we can act as an organised community for common purposes to promote social and economic justices while respecting and protecting the individual—his freedom of choice, his faith, his mind and its expression, his enterprise and his property.
	So, for Keynes the first was possible while respecting the second, but people were the basis of that organisation. I would argue that both are still possible today, and we hope to work constructively with all sides to achieve that end.

Baroness Hanham: My Lords, before turning to the debate and thanking the noble Lord, Lord Phillips, for generating it, I welcome the noble Baroness, Lady Falkner, to what I think is her first appearance on the Front Bench. I was feeling quite glowing and warm towards her until she got a little bit into her speech and started making some random remarks about the last Conservative government and the present policies of the Official Opposition. My warmth has faded a little for her in that capacity, but I am sure that she will do well on the Front Bench. So I welcome her to it.
	I thank the noble Lord, Lord Phillips, for generating what I think we would all agree has been a debate which has been wider ranging than perhaps we had anticipated—and probably wider ranging than the noble Baroness, Lady Andrews, will have looked and hoped for. I do not envy her the task of winding up the debate. It has also been extremely philosophical, careful, theoretical and analytical and, sometimes, practical. I hope that the noble Lord will feel that he has given us an excellent opportunity for this House once again to demonstrate the breadth of its wisdom and its ability to contribute.
	The whole world of localism and devolution has completely different connotations to practically everyone who discusses it. There are innumerable views, but I have sensed less political controversy today on what localism is about than I might have expected. Localism is of course the buzzword for bringing things much more narrowly to the local community—at least, I think that that is what it means; that is my interpretation of it.
	I shall concentrate on local government and declare my interest as a member of a local authority and former leader of Kensington and Chelsea. I mention Kensington and Chelsea only because, in her previous life, the noble Baroness, Lady Falkner, was a candidate in one election there. I just thought that I would point out that she has risen from those great heights to these.
	The Government think that they have given local government more power, responsibility and flexibility but, in reality, only a small amount of local discretion has emerged. It has emerged today that people think that it has still been subject to the little admired series of regulators, inspectors and targets and the whole system of comprehensive performance assessments. Although it would be fair to say that they have raised the game of poorer administrations, they have become an increasing burden on those that have always demonstrated that they can deliver local government efficiently, pragmatically and sensitively within a tight budget. Many local authorities have done that over the years.
	In future, as my noble friend Lady Seccombe pointed out, the assessments are being changed at the behest of the Audit Commission. It is interesting that that is changing but none of us have had the slightest opportunity to discuss that. The proposals have come out of left field and, I gather, are to be part of a new regime of inspection of local authorities—tighter, more difficult and probably, as has been said, making it harder to achieve the standards required. They do nothing to lessen the burden of government regulation and direction in the whole way that services are managed and made responsive to each local community.
	It would also be fair to say that the Government's interpretation of localism is to include the whole quangocracy, especially of regional bodies—we have heard quite a bit about regional government this afternoon—and regional assemblies. Despite the very clear decision of the electorate in the north-east, regionalism is still alive and with us. In housing, planning, environment and waste, strategic decisions are being made well away from local communities.
	However, it has clearly emerged this afternoon that it is local communities which matter. A local community is nothing without local people; it is not a series of houses; it is a body of people, individuals who come together, live together and want to make a contribution together. Both the right reverend Prelate the Bishop of Southwell and the noble Lord, Lord Foster, in a brilliantly evocative maiden speech, drew that out. No policy or strategy can work satisfactorily if the local community and people are not signed up to it and do not believe in it.
	The noble Lord, Lord Foster, comes from a part of the world which I know, where the traditions of close communities and personal relationships, connections and responsibilities for each other still exist. Thankfully, they run deep. The noble Lord spoke eloquently about government "testing to destruction"—I like that phrase—micromanagement from the centre. Many of us would say "Hear, hear!" to that. The destruction has not been quite sufficient. Perhaps the noble Lord, with his Salvation Army background, will allow me to express hope that he will blow his trumpet more frequently, although a little bird has told me that it might be a tuba rather than a trumpet.
	Micromanagement from the centre has been far too apparent, particularly with this Government. Their modernisation programmes have turned our constitutional arrangements and traditional structures upside down, and there is no evidence that policies have provided any benefit. They have forced unwieldy structures on organisations and in many respects have, for many of us, trounced tradition.
	The noble Lord, Lord Giddens, extolled the virtue of regions—it is a lot fairer to say "regions" rather than "regionalism"—in an extremely interesting speech about the effect of globalisation. But I disagree with him that there is such a thing as a regional identity in this country. We do not seem to be run by regions. Apart from Scotland and Wales, which have always had their own identities, we are not very good at being regionally focused. Our traditions are more local than that, and probably more county-based, as the noble Baroness, Lady Maddock, said.
	I shall drift aimlessly into the matter of the health service—I am chairman of an acute trust. I echo the observation of the noble Lord, Lord Chan, that despite all the efforts, money and detailed directions from the top, and the significant achievements on many of the targets imposed, the public still do not think that much has happened to change the National Health Service. There is great emphasis, both in local government and the National Health Service, on choice and people deciding what they themselves can do. But surveys show that people do not want choice and are happy for decisions to be made for them. They want to be sure that they have satisfactory provision, that their care will not be jeopardised by what happens to them, that people in authority are doing the right things and making the right decisions, and that those people know and understand the place that they are in. That brings us back to the importance of localism.
	The Government's control centres on their insatiable desire to legislate for everything and their command of the purse strings. They want to direct everything they pay for. There is not much way out of that dilemma. As the noble Lord, Lord Newby, said, a review of the financing of local government is under way but there seems no evidence that it will differ much from what we have seen previously. The options have always existed; it is a matter of deciding whether they can be brought together or whether there should be just one or the other.
	However, I am not altogether happy about the augurs from the experience in Northern Ireland, where it has been suggested that council tax contributions should be just under 0.75 per cent of the value of property. If my calculations are correct, such a system would mean that people in this country would pay anything from £400 to £50,000 annually in council tax. Clearly that will not work, so I hope that we will not get served up with such a system.
	I agree that we must return to the issue of greater involvement of local people and raising money locally. There is a question of how you do that and whether the business community should get involved.
	I wish to end with two brief points about what happens when local communities get disconnected from government. First, on Tuesday night, we had a discussion in the Chamber—I think that it was unique—about a planning application. The application, which was for a 50-storey tower block on the banks of the river, was refused by Lambeth council. The refusal was upheld by an inspector but, as we understand it—unless the situation has changed—the Secretary of State has indicated that he is minded to approve the application, thus overriding the local authority and the planning inspector. It was an interesting debate, and the case is an interesting indication of how the Government put their hand on something that local people do not want.
	My second point concerns the Mayor of London, who has decided to extend the congestion charge to Kensington and Chelsea. I declare an interest as a member of Kensington and Chelsea council. The Mayor has undertaken three lots of consultation on the matter, and, in all three, he has been resoundingly told that it is not wanted. There is no evidence that he has listened to that or paid it the slightest attention. The local community will be landed with something that it does not want.
	If localism is to mean anything, it must mean that decisions should be made as near as possible to local people. Those two examples—there is a myriad of others—indicate to me that we are nowhere near that. We need to be nearer. The debate that we have had today has taken us a long way towards understanding what people need. Until we recognise the fact that, even in a global society, people want to run their own life and their own community to the best of their ability, we are losing the plot.

Baroness Andrews: My Lords, it is always difficult when the Opposition spokeswoman sympathises with the Minister about the problems that she will have winding up. She is right.
	The debate could hardly have been more timely. On behalf of everyone, I thank the noble Lord, Lord Phillips of Sudbury, for a debate that has been incredibly thoughtful, speculative and expert. We are used to it in this House, but we continue to raise our standards. It has been an outstanding debate. We have ranged from Montesquieu to Keynes and from storm warnings to the Audit Commission.
	The maiden speakers, who made such an excellent contribution, could not have chosen a better debate in which to speak. It has enabled them to confirm, I hope, what the noble Lord, Lord Kirkwood of Kirkhope, said about the reputation of the House, once he had made his presence felt, as it were. It has also enabled the three maiden speakers to use their wide and differing experiences in the other place and elsewhere to our great benefit.
	I was delighted by each maiden speech. I am pleased that my noble friend has joined the great company of abolitionists. He will find that there are lots of them in the House; we have all had the same Damascene conversion. As the noble Baroness, Lady Hanham, said, he was able to bring such colour and vitality to the debate. I did not know that he played the tuba.
	I also did not know that the noble Lord, Lord Kirkwood of Kirkhope, had been a pharmacist. That is one of the things that I never got to the bottom of, when I knew him in another life. All I can say about his excursion into community destruction in Jericho in the context of this debate is that we would welcome any advice that he has about that. If he wants a session on the Companion, there are many people in the House who will be happy to help him.
	I do not think that we have been too unwelcoming to three new Whips. I am particularly pleased that we have two extra Celts. The Celtic fringe is beautifully strengthened by the addition of a Cornishman. We benefited enormously from his elegant account of his ancestry, something that always goes down well in this House.
	To come back to the nature of the debate, community is an incredibly fertile area for debate in this House, which, of course, has ranged from the global to the very local. I want to talk a lot about the local aspect. No one could have spoken with more conviction than the noble Lord, Lord Phillips, or could have introduced this debate in quite that way. He has had a habit of speaking, as we Quakers say, "truth to power" for many years, which he did again today by raising philosophical, practical and political questions, of which there are many rich seams. I do not want to interfere in the private grief between the noble Baronesses, Lady Falkner and Lady Hanham.
	There is a consensus in the Chamber, not least shared by the Government, that our instincts on what we are trying to do are right. The Government are engaging with precisely the same challenges, which we are doing in particularly innovative ways. ODPM, which I have the honour to serve, is very much at the forefront of the championing of local democracy and localism. I see improved governance through local autonomy and greater community involvement as inseparable, urgent and indispensable to revitalising democracy.
	We have a very ambitious agenda at ODPM to create sustainable communities, which are, basically, places where people are proud to live and feel safe in their homes. We want to ensure that no one is disadvantaged by the neighbourhood in which they live. Huge differences can be seen in our neighbourhood renewal programme. The agenda is about engaging people in the life of those places.
	The language today has been about ownership and trust, which are shared concepts, within the framework of local government, which we want to be as effective as possible. There has also been something of the spirit of a confessional about it. With the exception of my noble friend Lord Desai who is always provocative, not least towards the Government, we have shared our reservations about centralism. We have not gone so far as to compete on who is the greatest centralising government, but we have all been guilty in the past of assuming that Whitehall knows best and lost sight of what really matters.
	The Government can take credit for the fact that in recent years we have moved away from telling people what to expect, how to expect it, what it looks like and what they can do with it. We have moved far more closely to trying to find out what people want, how they want to be engaged and how we can make that happen.
	Our manifesto stated that services would be free and personal to all, putting more power in the hands of the patient, the parent, the citizen. This week, the Government published another type of manifesto, entitled, Together We Can. It was produced by the Home Office, bringing together many government departments, and sets out explicitly how we want to see government and people working together in a new relationship to ensure that people have a greater say. I commend it to the House because it brings together examples of how we are trying to involve local people and young people in regeneration strategies and evaluating how areas are changing and improving. That is just a taste of what is happening. I know that it speaks to the passion with which this debate has been addressed in this House. I look forward to noble Lords reading it, much as I look forward to reading all the research reports that were quoted across the House about the involvement of local communities, not least Burnley and Harrogate, about which the noble Lord, Lord Shutt, spoke very eloquently.
	Those are the sorts of projects that we are thinking about in Together We Can. In the areas where we are building new communities—for example, the great project that is the Thames Gateway—or where we are regenerating older communities—for example, in the north and west where the challenges of rebuilding a community are so different—we are determined to give local institutions and local people greater access to the levers that pull and push change. Managing change is what we have been talking about today. It involves building services around the needs of local people, whether they are students, patients, families or communities. It means finding new ways of funding and delivering services so that they reach the people for whom they are intended.
	We have talked about partnerships. It means building partnerships around people, not service providers. We have talked about leadership that should be as rich and resilient as possible. Primarily, however, it is about fostering local involvement, local ownership and active citizenship. All this amounts to significantly more than a different way of doing things. We are looking to secure a new balance between central and local government, what is potentially a new role for regions and cities and, crucially, a new relationship between government and the people we serve.
	We take as our starting point four principles which, when taken together, address some of the concerns that were raised by the noble Baroness, Lady Seccombe, and by my noble friend Lord Desai from the other and opposite point of view. In 2002 the Prime Minister set out a statement of what we want to see in terms of public service reform. The balance we seek to achieve is this: it is one between central government responsible for setting national standards—yes, because they are important; delivered by front-line professionals empowered to meet those standards; public service organisations enabled to respond to the different needs of communities; and cutting red tape. In achieving that balance we can address some of the fears which have been expressed about too many targets and too much centralism.
	The result is expanded choice. We have seen choice grow in applying those principles, perhaps most radically to public services such as education and health. As the noble Baroness, Lady Seccombe, will know, not only have we given schools greater freedom and greater security of funding, we have also created new opportunities for partnership across the community. I look with great pleasure at the opportunities offered, for example, by extended schools. We are offering schools a new relationship by cutting red tape and offering them more power to determine and evaluate their own improvement plans. Indeed, our debates on the Education Bill during the previous Session drove some of those important and progressive developments.
	Likewise in the health service, I am incredibly grateful to the noble Lord, Lord Chan, for setting out so powerfully what the Government are trying to achieve. He proved that in local areas we are reaching the place where we want to be. We have taken health spending to the lowest local levels by devolving it to primary care trusts. We have sought to involve patients in a variety of new ways, whether through expert patient groups, NHS Direct or walk-in clinics. No longer is there that formidable and patronising relationship between doctor and patient which made it difficult for patients even to approach doctors. We can do more, but we understand what we have to do. Moreover, we are of course strengthening and expanding our partnership with the voluntary sector. And, as I have said, whether in new places like the Thames Gateway or in older communities, we are looking for new ways forward.
	Our approach at the ODPM is based on the belief that devolution to the front-line is critical. We cannot achieve what we want in terms of improvements and the reduction of inequalities unless we devolve to those who deliver by freeing up bureaucracy, building trust and, as the noble Baroness, Lady Sharp, pointed out, bring innovation into the process. So we are the champions of local government and local partnerships.
	But all we do has to be contained and amplified within a framework of strong and effective local government. That unique role, as noble Lords know so well in this House, involves leading communities and ensuring that local voices are heard, setting a compelling vision and strategy—which means balancing interests—taking decisions in the interests of the community as a whole, and joining up delivery.
	Over the past few years we have led the debate on the future of local government. Since joining the department I have been deeply impressed by exactly what we are trying to achieve and how we have been trying to communicate those aims. We want to develop a shared vision of the future role of local government, and that means working at the right level. My noble friend Lord Giddens opened a rich seam when he spoke of globalisation and the role of the regions. Looking for the right level of involvement in a country as rich and diverse as this means taking on board what my noble friend had to say. We have seen the beginnings of an interesting and productive debate on where we see the regions going, and we know that at least two views on this are held around this House.
	Our view is this: we still see profound inequalities between regions and localities. For communities that means shorter lives, fewer jobs, worse housing, poorer education and bleaker prospects. We have a responsibility to address those issues, which means thinking and planning strategically around wider areas as well as around our cities. Certainly, I think we have somewhere to go with our cities. So that is why we are committed to strong regional agencies and why we want to see enhanced the frameworks for housing, economic development, skills and transport.
	The noble Baroness, Lady Sharp, referred to a commitment to innovation. As those of us who have been in the science policy community on and off know, it is extremely interesting how much we can learn from European regionalisation. I am very pleased to say that we are beginning to learn because, as the noble Baroness will know, we have committed ourselves to putting a new regional focus on innovation. Every region now has a science and industry council; we are looking to the RDAs to encourage a joining-up between HEIs and industry; and we have a greater connection between our universities. It is a hugely exciting agenda. If we can get that innovation agenda working at that level, we can transfer it also down into local regions.
	The noble Lord, Lord Shutt, referred to strong local leadership. He is absolutely right. I do not accept that localism necessarily means inevitable inequalities—that is the whole point about government holding the ring—because many projects, such as the new children's trusts, will depend on strong and confident partnerships. That is why we have taken steps to strengthen the capacity of local government to develop such partnerships.
	I know noble Lords opposite may think that we have not gone far enough in freeing up funding—and, again, the noble Baroness, Lady Sharp, raised some interesting questions in this area—but in the Local Government Acts of 2000 and 2003 we offered an extended package of financial freedoms, we reduced ring fencing, we repealed controls on borrowing and we have reduced inspection.
	We have speeded up the pace of reform by giving local authorities greater discretion over what they do by introducing three-year financial settlements from 2006–07. I am very pleased that we have created an opportunity for the noble Lord, Lord Newby, to speak about local income tax and local finance. We are fascinated by the debate going on within the Liberal Democrat Party. The noble Lord is right to say that we are having our own debate, and we look forward to what Sir Michael Lyons says in his report. So there is a very interesting agenda in that area.
	I do not think that I should undertake to speak for the Audit Commission but I am sure that James Strachan will read the debate with pleasure. It is a bit unfair to say that the changes to the CPA came out of left field because they were signalled and there was extensive discussion and consultation with local government. I am sure that that point will be taken.
	The key point about local government as it is developing lies in its ability and its demonstration of innovation. We have seen this in the local strategic partnerships—which have achieved a tremendous amount at local level, particularly in neighbourhood renewal areas—and in the local area agreements. The challenge of using many different funding streams to deliver important local services, such as children's play or healthy living centres, is one that local government have now faced up to.
	Local area agreements are a huge success. They have succeeded in reducing the number of targets in some areas from several hundred to just 60. We are looking at a new way of doing things by bringing statutory and voluntary partners together in a very profound way. We want to see more. Indeed, so enthusiastic are we that we have recently announced that every council and its partners will have the opportunity to develop a local area agreement over the next few years. But, as always, there is more to do.
	I wish I could take more time to speak about the fragility of local democracy itself by picking up on something that the noble Lord, Lord Shutt, said. It is not acceptable that 71 per cent of our councillors are male and that their average age is 57. It is a challenge that we face across all parties. We need to make the role of the local councillor more attractive and we should perhaps look at issues such as remuneration. That is a debate to which we shall return at another time.
	I want to talk about neighbourhoods and local communities. That is where the debate has centred and it is where the debate can be most productive. Devolution halts, but it does not stop, at the town hall. The sense of place, for most of us, is very straightforward. It is very local indeed: it is our street; it is our local park. That is where action takes effect; as the noble Lord, Lord Shutt, said, "I live here; this is my place".
	So how do we engage people in that sense of place? How do we engage them in the things that matter to them? This year, ODPM has published a paper called Citizen Engagement and Public Services: Why Neighbourhoods Matter. We need people to sign up to that, just as we need them to sign up to the principle. We need to understand why some communities are sterile, unhappy and unsafe, while others, which are similar in history and geography, are more successful. The right reverend Prelate would be particularly interested in that on the basis of his experience.
	We need to listen more intelligently. The noble Lord, Lord Chan, provided us with an excellent example of listening in the health service. We need to commit to helping neighbourhoods to become the kind of communities that they want to become. Self-help emerges from within. We believe that the new opportunity lies with the locality and with the neighbourhood. Neighbourhood management, neighbourhood wardens, the new deal for communities alongside initiatives such as Sure Start and extended school hours are helping people to feel that they belong. Whatever one reads, whether it is a research report or a report about the arts in communities, people say, "I want to belong; I feel I belong; this is where I feel my identity lies".
	That works on the wider political platform. The ultimate goal is engaging people and getting them to commit to local and national democracy. Where there has been greater engagement through resident elections and partnership boards, we have also seen an increase in the turn-out in local elections.
	We need to be confident about involving the community. We need to be realistic. Partnership comes with trust. Within the notion of community there are different communities which may be based on faith, on ethnicity and on interest. My noble friend Lord Griffiths gave us some very good examples of ecumenical activity across his patch, as did my noble friend Lord Hunt, when he mentioned that we are much more practised now in the theory and practice of community development. We know about community development. We have the animateurs on the ground, but we need to understand that it means different things. It means enabling people to take decisions, to develop activities, to sustain projects and to know and care for each other and that means delivering services and enabling statutory and voluntary services to work together.
	We believe that is critical and that is why we place community involvement at the heart of civic renewal. It is critical because it gives us better value for money, a far greater chance of stickability and sustainability in the community, and more inclusive, active democracy, greater social cohesion and opportunities for individuals to build up skills. As the noble Baroness, Lady Seccombe, said, this is all about individuals. At the end of the day, we are considering how to build that commitment.
	Volunteering is a touchstone of an active democracy and it has grown. The Home Office survey shows that the number of volunteers has increased by more than 1.5 million. Paradoxically, at the same time, the number of people who thought that they could influence local affairs fell from 43 per cent to 38 per cent. That is a crucial challenge for us. It is not enough to have the tenant management organisations and the Neighbourhood Watch committee. Being involved is more difficult. We have to understand. I am loath to quote Oscar Wilde but he said that socialism takes too many evenings. Those of us who regularly try to attend our GC, agree with him, but that is what it is about. It is about making people want to do those things.
	There is a long way to go before we win the war. Self-evidently, the greatest challenge lies in our poorer neighbourhoods, where people participate less, but where the need to participate is more. They are less likely to be involved, less likely to vote, less likely to use services, less likely to trust the council and less likely to care for the community. We have to engage the people there.
	We put in the ODPM document, Citizen Engagement and Public Services: Why Neighbourhoods Matter, the concept of a national neighbourhood framework, which will recognise and empower individuals and groups to take neighbourhood action, building on what we already know works. We are looking, for example, at triggers for action; mechanisms that would work, such as a petition that people could use to influence or prompt a service provider, letting the neighbourhood manage community assets and devolving money from the council to ward councillors.
	This is not easy to achieve—it is extremely difficult—but we have heard some good news today. First, the sense of community is strong and thriving in many instances, as noble Lords have testified, not least in faith groups. That was described as the Milky Way of diversity. Secondly, we have the evidence that things are working. We are not short of documentation or proof. Let us use that intelligently. Thirdly, we are determined to succeed and that determination is particularly well set out Together We Can.
	I am sorry that I have to stop because there is a lot more that I would like to say. It is a measure of how powerful this debate has been that we take away more questions than solutions. The debate has raised a lot of cross-party commitment and instinct which I am always happy to see. We have all agreed that with opportunity and participation come responsibility and respect. We are deeply serious that this matter is crucial to our democratic vision. I commend the noble Lord for giving us the opportunity to have such a terrific debate. I congratulate the maiden speakers and everyone else who spoke in the debate.

Lord Phillips of Sudbury: My Lords, it falls to me to finalise the proceedings. I must immediately say how grateful I am to all who have spoken. It is a rare event to have three maiden speakers on one occasion. I suspect that it is unique to have three former Chief Whips as the three maiden speakers—I am not sure that the word "maiden" is appropriate in that context. It was an honour and it was also striking to have three doughty men from the fringes—one from Cornwall, one from the very north of England and one from the far southern reaches of Scotland. They may be on the fringes geographically, but I suspect that they will be central to the proceedings of this House.
	In response the noble Baroness, Lady Hanham, who said that she hoped that I would be pleased with the debate, I am pleased. I am pleased because a wide expression of views was put forward. It has been a thoughtful debate, as the Minister summing up said, and we have a lot to think about. I suspect that there was far more that united us than divided us. It is one of the great conundrums, one of the challenges of governments—and unfortunately we have not had the experience recently—to try to trim back and control. Governments should observe a self-denying ordinance as regards the exercise of governmental power and accretion of those powers. There was a strange unanimity coming from different directions and quarters. On behalf of us all, I thank all of us and beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn

Community Interest Company Regulations 2005

Lord McKenzie of Luton: rose to move, That the draft regulations laid before the House on 1 March be approved [13th Report from the Joint Committee, Session 2004–05].

Lord McKenzie of Luton: My Lords, the Community Interest Company Regulations are to be made under Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004. This House debated that Act thoroughly last year. Noble Lords on the Benches opposite agreed at Third Reading that the Bill had been significantly improved during its passage. I do not, therefore, propose to restate the case for community interest companies, but rather to concentrate on the regulations themselves.
	Like the original proposals for community interest companies, these regulations have been subject to much consultation. Two drafts of the regulations were published while the Bill was under consideration and a formal consultation began in October 2004 for three months. The regulations now before us take account of the valuable comments made on the earlier drafts.
	Part 1 of the regulations contains the usual provisions on citation, commencement and definitions. Part 2 deals with the community interest test and excluded companies. The regulator of community interest companies should not have to decide whether the activities of any political party benefit the community, so Regulations 3 and 6 exclude political parties from being or owning community interest companies. Nevertheless, community interest companies may campaign or lobby, just as some charities do, and that will be allowed provided that the campaigning or lobbying is ancillary to their activities to benefit the community.
	Regulation 4 allows an employee-owned company to be a community interest company provided that its activities are intended to benefit the community. For example, it may have a policy of employing people who are long-term unemployed; or it may provide socially valuable goods or services at affordable prices to people who would otherwise not have access to them. Similarly, a company set up to benefit the employees of one employer, for example by providing childcare, could be a community interest company if it also provides childcare for the wider community.
	Regulation 5 defines the term "section of the community" for the purposes of the community interest test. The definition is deliberately wide because we do not wish to constrain the potential activities of community interest companies.
	Community interest companies must have certain provisions, mainly concerned with the asset lock, membership, governance and dividends, in their memoranda and articles. Those provisions are set out in Regulations 7 to 10 and Schedules 1 to 3.
	Regulations 11 and 12 in Part 4 specify the additional documents to be supplied on the formation of, or conversion to, a community interest company. Regulations 13 to 16 make it a requirement for the regulator to approve changes to a community interest company's objects, and for companies to publicise proposed changes before they are made.
	Regulations 17 to 25 deal with the cap on dividend payments, the distribution of any residual assets on winding up, and with share redemptions, buy-backs and capital reduction.
	Following consultation we have decided on a double cap on dividends. The first cap is a limit expressed as a maximum percentage of the paid up value of a share which can be paid out each year. The regulations set this at bank base rate plus 5 per cent. Since a community interest company should not pay out too much of its profits in dividends, the regulations add a second cap, so that no more than 35 per cent of profits can be paid as dividends in a given year. The guidance notes on the regulations contain four worked examples showing how those caps will work in practice. The arrangement strikes a fair balance: it allows community interest companies which wish to raise capital by issuing shares to pay a reasonable rate of return but ensures that a substantial proportion of profits is retained in the business or used for the community benefit. The regulator will be able to change the dividend caps in the light of experience, after consulting and with the consent of the Secretary of State.
	Regulations 26 to 29 deal with the community interest report which community interest companies will have to provide each year, to show how they have benefited the community, how much they have paid their directors, and whether they have transferred assets for the benefit of the community. The Regulator's office will check reports but their main value will be for those with an interest in a company: the employees or the community it is intended to benefit. They will be able to read the company's account of its activities and raise any concerns with the regulator who, under the 2004 Act, has powers to investigate where necessary. One way in which the regulator can intervene if he has serious concerns about the running of a community interest company is to appoint a manager under Section 47 of the 2004 Act. Regulations 30 to 33 make some provisions for such managers.
	Regulations 34 and 35 make minor consequential amendments to the functions of the registrar of companies. Regulation 36 and Schedule 5 set out the fees for the regulator's main activities of approving the formation of, or conversion to, a community interest company and receipt of the annual community interest report. We have set each fee at £15. Finally, Regulations 37 to 42 set out some basic rules governing the hearing of cases by the appeal officer.
	The Regulator of Community Companies, John Hanlon, was appointed, in accordance with the procedures of the Office of the Commissioner for Public Appointments, with effect from 1 April and he is producing extensive guidance for different types of community interest companies. These regulations represent the final step to implement community interest companies. There is already a queue of organisations wishing to form, or convert to, community interest company status and over 340 organisations have expressed interest in this type of company. It is clear, therefore, that the community interest company will meet a real demand. I beg to move.
	Moved, That the draft regulations laid before the House on 1 March be approved [13th Report from the Joint Committee, Session 2004–05].—(Lord McKenzie of Luton.)

Lord Hodgson of Astley Abbotts: My Lords, I am sure that the whole House is grateful to the noble Lord, Lord McKenzie of Luton, for his careful explanation of these detailed, technical regulations. I believe that this is the first time we have had the pleasure of taking part in a debate together since his recent elevation, on which I congratulate him.
	For those of us who were involved in the passage of the parent Bill and approved the general principle of CICs, the arrival of these regulations is to be welcomed. I have read the record of the proceedings on these regulations in the other place and I shall endeavour not to repeat the points and questions raised there. I was glad to note from those proceedings, and to hear from the Minister, that a regulator of CICs has been appointed, that guidance forms and model articles of association are being prepared and that no fewer than 340 expressions of interest in becoming a CIC have been received.
	During the Committee stage of the Bill here we were concerned that the financial costs of the CIC regulatory regime had been undercooked. The noble Lord, Lord Evans of Temple Guiting, will recall that. It would be helpful if the Minister could confirm to the House whether, in the light of experience so far gained, those original cost estimates are being met. In order not to lead him into temptation unnecessarily, I should tell him that paragraph 245 of the original Explanatory Notes to the Bill gives a total estimate of set-up costs in the range of £250,000 to £500,000. His colleague in the other place, Mr Alun Michael, said that set-up costs were now £515,000. So we are already some way above the top end of the range. Paragraph 244 of the Explanatory Notes states:
	"We estimate the regulatory annual running costs at approximately £310,000".
	Mr Michael said in the other place that the annual running costs are now £420,000. I can understand the difference between £500,000 and £515,000—after all, that is only 3 per cent. However, by my calculations the difference between £310,000 to £420,000 constitutes an increase of 35 per cent. It was, therefore, slightly strange that Mr Michael said:
	"On the cost of the regulator the estimates in the regulatory impact assessment remain broadly correct".—[Official Report, Commons Second Standing Committee on Delegated Legislation, 21/6/05; col. 16.]
	This Government can play a bit fast and loose with their accounting, but I do not think that an increase of 35 per cent could be described as broadly correct on any normal understanding of that word. Therefore, some clarification of what has been going on with the costs would be helpful.
	I turn to two broad points. At Second Reading of the Companies Bill many noble Lords, myself included, wondered whether, desirable though the CIC model might be, it would not have been better to introduce it subsequent to, not in advance of, the long awaited Charities Bill. Clearly, there would be many points of overlap between the two pieces of legislation. Now the Charities Bill is progressing through your Lordships' House under the stewardship of the noble Baroness. Clause 32 of that Bill, and the associated Schedule 6, establish a new corporate format—a charitable incorporated organisation. That appears to duplicate the CIC concept. Will the noble Lord tell the House how CICs differ from CIOs other than that one is regulated by the Charity Commission and the other by the DTI, and that one may be a charity and the other may not? Are we not in danger of establishing expensive duplicative regulation?
	This takes me to my second broad point—why cannot a CIC be a charity? We discussed this at some length in Committee on the Bill. For reasons that were not entirely clear, beyond a possible departmental turf war between the Home Office and the DTI, the noble Lord, Lord Sainsbury—who handled the Bill expertly for the Government—would not change his view. Now I read in paragraph 2, "Interpretation", that "asset-locked body" means:
	"a community interest company, charity or Scottish charity".
	Do the Government now admit that there is no fundamental reason why a CIC should not be a charity?
	I have some more detailed questions. I note that Regulation 3 deals with the issue of political activities not being treated as being carried on for the benefit of the community. I do not seek to raise the difficult issue of the definition of political activity, which occupied much of the committee's time in the other place, but I am interested in what process the regulator will adopt to ensure compliance with the provision. It is easy to envisage circumstances in which a CIC is formed on a perfectly reasonable basis but over the years becomes more extreme in its approach. How will the regulator check that, and what sanctions does he have to improve performance? I note under Regulation 32 that he has the power to "remove a manager", but can he impose conditions on the CIC itself? In an extreme case, can a CIC be "de-CIC-ed", and if it can be, what happens to its assets? Does some sort of cy-pres rule apply?
	Secondly, will the Minister explain the purpose of Regulation 5, "Section of the community"? I am not clear from the drafting whether it is permissive or restrictive in its intent or of the role it plays in Part 2 of the regulations.
	Thirdly, Regulation 13 specifies actions that require the regulator's approval. I see no time limit within which the regulator must opine. There could be a concern that on a tricky point the regulator could take a long time to reach a decision, and that could seriously damage the operations of the CIC in question.
	In Part 6, Regulation 17, "Declaration of dividends", I note in paragraph (1)(b) that the payment of a dividend requires the approval of "an ordinary or special resolution". The latter is an unusual provision. Dividend payments normally require only an ordinary resolution—a simple majority; not a special resolution—and a 75 per cent vote in favour. Is some special provision expected for dividend payments by CICs? If so, will the Minister explain it and the thinking behind it?
	Under Regulation 17, will the Minister give an example of a case falling in Regulation 17(4)(b) that is not caught by the provisions of Regulation 17(4)(a)? I am sure that his officials regard that as a full toss of the leg stump and will be able to provide him with an easy answer, but if they cannot I will be perfectly happy if he can write to me with an example at a later date. I understand that it is quite a detailed question to raise in this way.
	In raising these questions with the Government, it would be churlish if I did not congratulate them on the ingenious nature of Regulation 20 and the provision to allow a catch-up on unused dividend capacity. Equally, the Government have struck the right balance in Regulation 22 as to the interest rate cap of 4 per cent over the Bank of England base rate and the maximum level of dividend—35 per cent of distributable reserves—which the Minister referred to in his opening remarks.
	I am slightly more uneasy about the share dividend cap being set at 5 per cent over the Bank of England base rate. The difference between an equity risk and a debt risk—the latter may well be secured on the assets of the CIC—should surely be reflected in a spread greater than 1 per cent. I appreciate that CICs are a special case, but the Minister might care to explain why the latter figure was chosen. For my part, a spread of 5 per cent between debt and equity might be more appropriate. So, for debt it is currently 4.75 per cent, plus 5 per cent, which is the 9.75 per cent figure that Mr Michael referred to for debt, with perhaps another 5 per cent for dividends on the equity, giving a maximum of 14.75 per cent.
	Could the Minister clear up confusion in my mind regarding par value and paid-up value—subscribed capital—in relation to the operation of the cap? I was fully clear that the Government were not linking the cap to the par value of the share; indeed paragraph 22(5) seems to make that clear. The Minister used similar words in his opening remarks. However, the Minister in the other place—Mr Alun Michael—said:
	"Since the base rate is currently 4.75 per cent, the maximum dividend for a £1 share is 9.75p in a year".—[Official Report, Commons Second Standing Committee on Delegated Legislation, 21/6/05; col. 6.]
	I follow the arithmetic, but his choice of words indicates that he was talking about par value. Clarification would be welcome.
	Finally, I turn to the position of Scotland, which was also discussed in Committee in the other place, but without much light being shed. Will the Minister take us through the position? In particular, will CICs be able to register at Scottish Companies House in Edinburgh? Are English CICs able to operate north of the Border?
	As I said, we welcome the principles behind the CICs, so are pleased to see the regulations. Nevertheless, we are always anxious to eliminate duplication in regulations and minimise any regulatory burden. I look forward to hearing the Minister's response.

Lord Newby: My Lords, we on these Benches are also pleased to see the regulations. We welcome the establishment of the community interest companies. The Minister will be pleased to know that I shall not put him through such a rigorous viva as the noble Lord, Lord Hodgson, did. I have one question to raise and one point of clarification.
	Regulation 11 requires any new community interest company to provide a community interest statement. Under the definitions, in that statement a company is required to indicate how it is proposed that its activities will benefit the community. I would welcome an assurance from the Minister that, in interpreting that requirement, the regulator will not require the company to set out a hugely detailed financial analysis of exactly how every activity that it might undertake will benefit various parts of the community. At the time that the company is established, a paragraph or two of broad explanation would suffice. Such a definition could lay itself open, under an over-rigorous and efficient regulator, to an onerous requirement on a new company to set out in greater detail than is required exactly how it would operate.

Lord McKenzie of Luton: My Lords, I thank the noble Lords, Lord Hodgson and Lord Newby, for their welcome to the regulations, and for their questions, which I shall try to deal with as fully as I can.
	I shall deal first with the question asked by the noble Lord, Lord Newby, which was about the role of the regulator in the statement. The objective is that the statement will not be unduly onerous; to make it so would defeat the thrust of the regulations and the legislation. It will be a matter for the regulator, in light of experience in each case. In some circumstances, a more rigorous expectation and examination may be required, but practice will doubtless lead us in the right direction on that. The provision is not intended to be restrictive and onerous in a manner that would preclude enterprises using that opportunity.
	Let me see whether I can deal with the questions raised by the noble Lord, Lord Hodgson. The costs that he quoted from my right honourable friend in the other place—the set-up cost being £515,000, with annual running costs of around £420,000—are our current estimates. The Explanatory Note figures were estimated at the beginning of 2004 but the regulatory impact assessment—it was more recent, in October 2004—was closer. It is with those figures that the costs are broadly in line. I hope that that clarifies the matter.
	The essential difference between a CIO and a CIC is that identified by the noble Lord—that one is a charity and one is not. A charity is subject to more rigorous regulation, and has the benefit of a tax exemption to go with it. The purpose of the regulations is to provide another vehicle—not a mandatory vehicle—for social enterprises and, in particular, for them to choose which they want.
	Moving on to the question about the definition of the asset lock, the fact that one of the destinations of a distribution of assets from a CIC is a charity, as well as a CIC, is simply broadening the opportunities for the movement of assets from that enterprise. The fact that it is included in the definition does not seem to me to mean that we treat the two as being the same.
	A question was asked about the role of the regulator in looking at political activity. Again, it is a matter for the regulator to take forward. At the end of the day, the regulator will have sanctions, including the appointment or removal of directors, the investment of property in the official property holder and, as a last resort, it could have the CIC wound up. So sanctions are there but, obviously, the objective of the process is for the regulator to engage along the way, if he thinks that the entity is strained beyond that which is incidental and reasonable.
	Regarding territorial engagement, English CICs can operate in Scotland, like other English companies, and Scottish CICs can register at the Companies House office in Edinburgh. I hope that that deals with the point.
	The noble Lord asked why payment of dividends required either an ordinary or a special resolution. It probably depends upon the nature of the shareholding in the entity. The key point is that it does not provide for interim dividends. It is important to ensure that the cap on dividends is effective.
	The proposals before us, regarding spread on debt and equity, were based upon research and considerable discussions with the social enterprise sector and others to gauge what would be a reasonable spread in practice. In both instances, they try to strike that balance between recognising that capital should be available to those enterprises, without going all the way to generating the sort of returns that a normal profit-making company would wish to see. Regarding par versus paid up value, the cap applies to the paid up value of the shares, not the par value. That would often be the case, but it would depend upon premiums.
	Regarding dividend resolutions, the model articles of association specify an ordinary resolution for declaring dividends and we expect that most would choose that. But if a company wants to specify a higher threshold, it will be able to do so.
	I have tried to answer each of the questions. If I have missed any, I hope that the noble Lord would accept that I shall look at the record in Hansard and follow up in writing, but, if he wishes to come back on any point, I shall try to deal with it.

On Question, Motion agreed to.

Extradition: UK and USA

Lord Hodgson of Astley Abbotts: rose to ask Her Majesty's Government whether, in the light of experience and the fact that the United Kingdom has ratified the treaty while the United States has not, they will now review the operation of the 2003 extradition treaty with the United States.
	My Lords, I am pleased to have the chance to ask this Unstarred Question. It may have a familiar ring to those who were present at, or who may have read (at col. 711 of Hansard), the debate which followed the Unstarred Question put by the noble Lord, Lord Goodhart, on 6 December last year,. It is with great pleasure that we shall hear from the noble Lord in this debate—he is, of course, a lawyer of renown. I am not a lawyer, but, from my non-legal point of view, the current US-UK extradition arrangements appear quite extraordinary. In short, recent developments in our extradition arrangements with the United States have caused concern to the public, have raised questions about the role of the Government in protecting our fellow citizens, and have raised questions about the effectiveness of our parliamentary scrutiny.
	A brief background may perhaps be helpful. On 31 March 2003, the noble and learned Lord, Lord Falconer, announced that the Home Secretary and the US Attorney-General were about to sign a new US/UK extradition treaty. He explained that the treaty reflected the best modern practice in extradition, and meant much closer co-operation in fighting against terrorism and other serious crime. There was no parliamentary scrutiny of the treaty and the full text was available only six weeks later. Considering that the treaty makes major changes in our extradition arrangements with the United States, it is remarkable that Parliament was not given an opportunity to debate the treaty fully.
	The provisions of the new treaty mean that American prosecutors no longer have to provide prima facie evidence in order to extradite a citizen from the United Kingdom. Article 8 of the treaty requires the US to provide a statement of the facts of the offence only. Second—and more surprising—is the lack of reciprocity in the treaty. The treaty contains an asymmetry in the obligations of the parties. As I said, in Article 8 it provides that the United Kingdom's requirement of prima facie evidence does not apply, but the statutory requirement in the Fourth Amendment to the United States constitution, requiring probable cause, does apply in requests to the United States.
	As one excitable senior US attorney, Mr Scott Hammond, the deputy assistant attorney-general of the Department of Justice anti-trust division, recently bragged at an anti-trust conference in Las Vegas on 3 and 4 March this year that the US no longer has to make a prima facie case in support of extradition requests, or even provide witness affidavits. He also bragged that hearsay affidavits by the prosecutor are enough and appeal rights have been curtailed.
	Such an imbalance in US/UK treaty arrangements appears unprecedented. Sometimes I even wonder if the Government understand the meaning of the word "reciprocal". Reading the comments made by the noble Baroness, Lady Scotland, on behalf of the Government in response to a Question tabled by my noble friend Lord Marlesford suggests that her understanding of the word is quite different from mine. With regard to extradition requests between the UK and the US, she stated that,
	"the practical consequences of what we are doing now are very reciprocal. We make applications to them. They adhere to those and make applications to us".—[Official Report, 15/6/05; col. 1198].
	She seems to me to have forgotten the difference in the underlying application procedures, which form the very essence of whether the arrangement is reciprocal. Simply because both parties adhere to the procedure does not of itself mean that there is reciprocity in the arrangement if the procedures themselves are different.
	So much for the inherent imbalance in the basic arrangement, but matters are much worse than that because, to date—over two years later—the US has yet to accept even its unequal side of the agreement. On 16 December 2003, the noble Baroness gave an assurance, (Hansard col. 1071) on behalf of the Government that the 2003 treaty would be ratified by the Senate in early 2004. Yet, in a recent Question tabled by my noble friend Lord Marlesford on 15 June, she said:
	"I express our genuine disappointment that the United States' authorities have not found the time or energy to ratify the provision. We are pushing the issue very hard".—[Official Report, 16/6/05; col. 1198.]
	That comment was made 18 months, almost to the day, after she originally stated that the treaty was shortly to be approved by the Senate, and we still await ratification.
	Professor Bassiouni, a distinguished research professor of law at DePaul University College of Law in Chicago, predicts that US ratification of the treaty is still a long way off and that it is unlikely to be ratified before the end of 2005. He believes this to be the case for two reasons. The first is that the treaty is numbered 108/23 by the US Senate Foreign Relations Committee, indicating that it was the 23rd treaty to have been received by the Senate in the 108th Congress. The second is that the 2003 treaty has already been the subject of opposition by a number of civil rights organisations, the American Civil Liberties Union, ACLU, being one of them. In addition, a number of Irish-American organisations have also expressed their opposition.
	A further major worry concerning this treaty is the breadth of its remit. The primary reason originally given for the treaty being signed was for the fast-track extradition of terrorists. As no less a person than the Prime Minister said, the treaty is,
	"justified and right in a post-September 11 context".
	The Government gave specific assurances that UK citizens would not be liable for extradition to the US for financial crimes. On 15 December 2003, in a debate in the other place, Caroline Flint, speaking for the Government, responded to a Question asked by Mr Menzies Campbell MP. She said:
	"We do not have such a range of offences involving financial crime. The cases mentioned by the Financial Times"—
	there was an article in the paper on that day—
	"—such as prices fixing—would not apply. Dual criminality would have to exist".—[Official Report, Commons, 15/12/03; col. 26]
	Yet, according to recent newspaper reports—for example, in an article headed "A white-collar Guantanamo", which appeared in the Times on 20 May 2005—the total number of US extradition applications to date is 45. Half of those relate to white-collar crimes, and not one of the nine extraditions so far agreed to relates to terrorism.
	The impetus for the new arrangements in the UK and the US was to aid the extradition of terrorists between countries, particularly in the wake of 9/11. However, the reality is that the US can and is now using the simplified procedures to extradite UK executives for financial crimes, even where the conduct that links the crimes to the UK is limited.
	It is difficult to illustrate this point without giving a specific example. Of course, once one gives an example, Government Ministers hide in an air raid shelter entitled sub judice. Nevertheless, here goes. As many noble Lords may have read, the US is currently undertaking extradition proceedings in an attempt to extradite Mr Ian Norris. In bringing up the case involving Mr Norris, I do not wish to draw the Government into debate on the subject. But it is, nevertheless, a way to demonstrate the absurdity and basic injustice of the current US/UK extradition arrangements.
	Mr Norris is a 62-year old former chief executive officer of the engineering business Morgan Crucible and he is a UK citizen. He was chief executive of the company between 1998 and 2002. Morgan Crucible had been part of a European cartel in the carbon industry since the 1930s. In 2001, with Mr Norris's encouragement, Morgan Crucible reported the cartel to the European Commission.
	In November 2002, Morgan Crucible and its main US subsidiary entered into plea bargaining with the Department of Justice and paid fines in the US totalling $11 million in respect of certain price-fixing activities in the US. By this time Mr Norris had already retired from the company.
	In September 2003, some time after he retired, Mr Norris was indicted in the US on charges of price-fixing and obstruction of justice. That charge relates to conduct from at least as early as 1989 through to the year 2000. A request for the extradition of Mr Norris was made in December 2004 and proceedings are continuing.
	Mr Norris's case is a good example of the US government using the simplified extradition regime in the UK to extradite a UK citizen in circumstances that appear wholly unsatisfactory. The original price-fixing charge would not stand up in English courts, due to the fact that this was made an offence in the UK only with the passage of the Enterprise Act 2002 and the allegations relate to the 1990s. The provisions of the Enterprise Act are not retrospective.
	The US provided additional information so that the charge could be interpreted as conspiracy to defraud. So, not only is the basis of the charges questionable, butte majority of the conduct complained of occurred in the UK and Europe and not in the US. The only other two countries, France and Ireland, that have the same non-reciprocal arrangements with the US have specific protections built into their treaties for their own citizens, ensuring that extradition can be refused where their own nationals are sought or where the alleged offences took place substantially within their territory. Why did the Government not do the same in the UK?
	The attitude of the US to the new extradition provisions is exemplified by recent speeches from Members of the US Department of Justice. Scott Hammond, in the March Las Vegas speech from which I have already quoted, went on to say that to have the UK as the first government to bat for and assist the US in seeking extradition was remarkable.
	His reaction to the British acceptance of Norris's indictment for conspiracy to defraud, replacing the price-fixing charge, was to say that:
	"The UK Government looked at the information that was provided in support of the extradition and said: 'Do you know what? That looks like conspiracy to defraud to us.'
	That is the attitude shift we are talking about. How many countries are there out there that have dual criminality which allow for extradition on anti-trust? A handful. How many have conspiracy to defraud as a crime? A heck of a lot more. If those countries start making the same judgment that the UK has, man that changes everything".
	Equally worrying were Hammond's views on the benefits of cutting down on paperwork. He said:
	"We don't even have to provide witness affidavits. I mean, we may, if we keep doing it, begin to tax the resources of some foreign countries, but from a divisional resource perspective, it is nothing. It is nothing. It is a drop in the bucket compared to the bang for the buck we are getting on this".

Lord Bassam of Brighton: My Lords, I rise only to draw the noble Lord's attention to the Companion to the Standing Orders at paragraphs 4.51 to 4.59, which relate to sub judice matters. I cannot judge what is and what is not sub judice, but I think that the noble Lord is extremely close to the mark here. Mechanics are one thing but the content and detail of the case, with which the noble Lord is dealing, probably oversteps the remit set out in the Companion.

Lord Hodgson of Astley Abbotts: My Lords, of course I accept that rebuke from the noble Lord. I specifically said that I did not want the noble Baroness to discuss the case.

Lord Bassam of Brighton: My Lords, with respect, the noble Lord is talking about it, which is the problem.

Lord Hodgson of Astley Abbotts: My Lords, my quotations are from the US Department of Justice and Mr Hammond, but I accept what the noble Lord says and will ensure that I go no further on that.
	Those excerpts speak for themselves. They suggest that, rather than being used as a fast-track method for extraditing terrorists, the treaty is being used by the US for much wider purposes.
	So where do we go from here? It is perhaps relevant to draw the attention of the House to Article 24, which is entitled, "Termination". It provides that either state may terminate the treaty at any time by giving written notice to the other state effective six months after the receipt of such notice. That is one option. The other is to remove the US from the list of Part 2 designated states in the Extradition Act 2003 that are permitted to dispense with prima facie evidence.
	In summary, the treaty has been missold to the public in this country; opens UK citizens to potentially oppressive legal action; is of no value to the UK; and, to date, has been of no value to international security. I look forward to hearing from the noble Baroness which of those options—termination or removal—the Government intend to follow, and if and when they intend to do so.

Lord Goodhart: My Lords, I am grateful to the noble Lord, Lord Hodgson of Astley Abbotts, for returning to the issue of extradition to the USA, on which, as he said, we have already had several debates and Questions. I also admire his dexterity in shifting seamlessly from community interest companies to extradition.
	Extradition to the USA is governed—or, at any rate, in legal theory it should be governed at present—by the treaty with the USA signed in 1972, which came into force in 1977. I refer to it as the 1972 treaty. The new 2003 treaty, which was signed on 31 March 2003, has not yet been ratified by the US Senate and is therefore not yet in force. Until it comes into force, the 1972 treaty remains in force. Under Article IX(1) of the 1972 treaty,
	"Extradition can be granted only if the evidence"—
	I pause to emphasise the word "evidence"—
	"be found sufficient according to the law of the requested Party to justify the committal for trial of the person sought if the offence of which he was accused had been committed in the territory of the requested Party".
	For extradition from the United Kingdom to the USA, the American authorities therefore had to produce evidence sufficient to show what was then known as a prima facie case or, to use more modern wording, a case to answer. For extradition from the USA to the United Kingdom, the British authorities have had to meet the equivalent American test of probable cause. It is said that "probable cause" is a lower test than the prima facie case. It may be slightly lower but there is no significant difference in practice. I do not believe that American courts frequently try people who do not meet what we call the "case to answer" test.
	The situation under the 2003 treaty will be entirely different. For extradition from the USA to the United Kingdom, the situation is broadly unchanged. The United Kingdom must prove a reasonable basis to believe that the person sought committed the offence for which extradition is requested. That is the "probable cause" test. But for extradition from the United Kingdom to the USA, all that the Americans need to do is to produce,
	"a statement of the facts of the offence"—
	a statement, not evidence.
	The 2003 treaty is unfair because it is not reciprocal. If the Americans are unable under their constitution to extradite their own citizens without evidence, they should not expect us to deport people from the United Kingdom on a different basis. But I must point out that the debates about the 2003 treaty are hypothetical because that treaty is not yet in force. Indeed, it may never come into force because of lobbying against it by the ACLU and Irish-American groups in the USA. Although the Senate, while dominated by the Republicans, may not pay much attention to the ACLU, it is likely to pay a good deal of attention to the Irish-American lobby.
	Why is it, therefore, that somehow the rules under the 1972 treaty, which ought still to govern extradition from this country to the USA, no longer apply? It is because in December 2003 the Government took a unilateral and, in my view, inexcusable decision to designate the USA under Sections 71 and 84 of the Extradition Act 2003 by a statutory instrument. We opposed that statutory instrument at the time and forecast the troubles that we thought were likely to result, and have indeed resulted.
	The effect of a designation under Section 84 is that the judge hearing the case is directed by the Extradition Act not to decide whether there is evidence sufficient to show a case to answer. All that need be produced is information about the offence. There is a world of difference between evidence and information or statements of fact. Evidence can be challenged, tested and rebutted in court. A statement or information cannot be so challenged and, unless defective on the face of it, must be accepted at face value.
	In answer to the question, referred to by the noble Lord, Lord Hodgson, which the noble Lord, Lord Marlesford, asked on 15 June, the Minister implied that there was no real difference between information and evidence. That is entirely incorrect. Does she accept that, as matters now stand, information provided to the United Kingdom by the USA cannot be tested in proceedings by cross-examination and cannot be rebutted by other evidence produced by the person whose extradition is sought?
	In the Lotfi Raissi case, the extradition of the Algerian pilot, who was accused by the United States of involvement in the terrible events of 9/11, was refused because of the weakness of the evidence when tested. Does the Minister accept that that testing would not now be possible and that the case might therefore have had an entirely different result? Does she also accept that information provided by the United Kingdom to the United States is treated as evidence that must be proved and can be challenged in court?
	In effect, what has happened is that a vital provision of the 1972 treaty has been overridden by government fiat while that treaty still governs the extradition relationship between us and the USA. The effect of that is to deprive defendants in extradition cases of rights given to them under the 1972 treaty and, incidentally, to remove from the US Senate any incentive to ratify the 2003 treaty.
	It has never been explained what the Government's reasons for designating the USA in the December 2003 order were. I suspect that they were simply a matter of administrative convenience. The Government were, at the time, designating a large number of countries in which agreements were already in force to waive the need for evidence. Those agreements were all reciprocal. No doubt, it was thought convenient to include the USA in the list, on the assumption that the 2003 treaty would soon be ratified. I do not believe that the Government ever considered whether it was proper to waive the rights of people in this country to a protection granted them under an extradition treaty that was still in force. They were far too sanguine about its imminent ratification by the USA.
	The question asked by the noble Lord, Lord Hodgson of Astley Abbotts, is in fact a double question. The first leg of the question is: should the Government renegotiate the 2003 treaty, to ensure that it is not introduced until it is properly reciprocal? Secondly, whether or not that happens, should the Government revoke the designation of the USA for the purposes of Sections 71 and 84 of the Extradition Act 2003 under the order made in December 2003, unless and until the USA ratifies that treaty. The answer to the first question—I agree with the noble Lord, Lord Hodgson of Astley Abbotts—is "Yes". The answer to the second question is, I believe, even more plainly "Yes".
	Whatever justification there is for the 2003 treaty—the justification seems thin to me—there is no possible justification for unilaterally overriding the rights given by the 1972 treaty while that treaty is in force. The Government should revoke the designation of the United States under Sections 71 and 84 of the Extradition Act and require the USA to make a proper case, based on evidence, in support of the claims now pending for extradition.

Baroness Scotland of Asthal: My Lords, I thank the noble Lords, Lord Hodgson of Astley Abbotts and Lord Goodhart, for entering into what has now become a familiar debate. I shall answer the first two questions and speak to the issue raised about the nature of the extradition treaty before I go on to explain why the Government have come to their view.
	We do not intend to renegotiate the treaty with the United States, and I must disappoint noble Lords by saying that nor do we intend to revoke the designation of the United States as one of our partners. The noble Lord, Lord Goodhart, is absolutely right. We argued quite properly and extensively about all these issues during the 2003 debates on the Bill. As he will remember, those were extensive and comprehensive debates. This House and another place had an opportunity to have their say about whether the Bill was fit to become a statute. The House and the other place spoke, and, as noble Lords will know, the Bill has become law and now applies. I invite noble Lords to allow me, rather than repeating all those arguments, to rely on the answers that I gave then on those matters of detail. I will, however, deal with the general issues raised by the noble Lord.

Lord Goodhart: My Lords, I should perhaps have made clear, as I hope I had in my speech, that nothing I have said implies any criticism of the drafting of the Extradition Act itself. Apart from the treaty, which is a separate matter, I am critical of the use that the Government made of the powers given to them by Sections 71 and 84 of the Act.

Baroness Scotland of Asthal: My Lords, I understand that. I hope that we made it plain when we were going through the Bill that our intention was to include the USA in the schedule and to allow that matter to be debated when it came before the House. We did debate it before the order applied. Noble Lords discussed that issue and the order was made. I am simply saying that although I understand that these issues have generated a deal of passion, I would not tire the House today by repeating the answers that I gave in reply to those debates.
	I need to say to the noble Lord, Lord Hodgson, that he is not right in saying that there has been a dramatic change in the nature of the offences for which extradition has been sought. For the period 2003 to 17 June 2005, 17 people were returned to the USA from the United Kingdom for the following offences: six drug offences, five fraud offences, two sexual assaults on a minor, two theft cases, a child abduction case and a murder. The average length of time from the date that the person was arrested to the time that he or she was returned to the United States was 30 months.
	For the period 2003-04—there have been no returns so far in 2005—five people were returned to the United Kingdom from the USA for the following offences: drugs, child abuse, murder, sex offences and child abduction. The average time between the request being made and the person being returned to the United Kingdom was five months.
	Regarding returns to the US from the United Kingdom since the new provisions came into effect on 1 January 2004 until 17 June 2005, so far there have been 11 persons returned to the United States from the United Kingdom for the following offences: six drug offences, an indecent assault, a theft, a grievous bodily harm, a mail fraud and a fraud. The average length of time from the date that the person was arrested until surrender to the United States was seven months.
	It is—

Lord Monson: My Lords, I am grateful to the noble Baroness for giving way.

Baroness Scotland of Asthal: My Lords, I do not think that I will give way. This is a debate in which two noble Lords have participated, no one spoke in the gap and I am now replying. I beg the House's pardon, but I think that it would be outwith our rules to give way to the noble Lord.

A noble Lord: Hear, hear.

Baroness Scotland of Asthal: My Lords, so it is quite wrong for the noble Lord, Lord Hodgson, to say that there is no utility, from our point of view, or from that of the United States, for this Act to have been dealt with in the way that I have just described.
	It is a privilege to be able to put to bed, I hope for the last time, some of the misconceptions which seem to have surrounded the new extradition treaty that the United Kingdom negotiated with the United States. The operation of extradition between the United States and the United Kingdom is under constant review at official level, as is extradition with any of our many other extradition partners. It is clear that we would wish to identify difficulties, if any, at an early stage so that they can be addressed.
	As I explained, and as I have explained on many occasions, the Extradition Act 2003 effectively implemented the provisions of the new UK/US extradition treaty. Our experiences, as I hope I have just outlined, of the new regime have been extremely positive. For example, the average time it took for the United Kingdom to process an extradition request from America, under the old arrangements, was 30 months. In stark contrast, the average time it takes the US to process requests from the United Kingdom is five months. I am sure that noble Lords will agree that our prosecuting authorities, pursuing fugitives from our justice system, must have cause to be grateful to the United States authorities for that level of service.
	Under the new arrangements we have improved our turnaround times to an average of seven months. That is much closer to the US level, though not equal to it. In any event, to those who are concerned that we have made extradition to the United States too easy and have had nothing in return—I think that that is the import of what noble Lords are saying—I simply invite them to look at the evidence. I hope that noble Lords will also agree that the considerable reduction in the time period for completing extradition requests is not only in the interests of government, but also in those of victims, witnesses, our courts and fugitives themselves.
	Indeed, I cannot see how improving our extradition arrangements by updating our domestic extradition legislation, which included implementing provisions in the new US/UK extradition treaty, can be seen as anything other than in the interests of justice. The Government have ensured that the very important safeguards remain in place for individuals who may find themselves the subjects of extradition requests. I have previously explained those safeguards in detail in this House, so I hope that the noble Lord, Lord Hodgson, is not rising to ask me to tire noble Lords by going through them again today.

Lord Hodgson of Astley Abbotts: My Lords, as ever, I am most grateful to the noble Baroness. Could she confirm that every country with an extradition arrangement with the US has a reciprocal arrangement, except for Ireland and France? However, Ireland and France have built into the treaty special provisions to balance that non-reciprocity relating to their own citizens and alleged offences committed primarily within those two countries. The noble Baroness has spoken of timing, speed of process and so forth, but the concern here is that the non-reciprocal basis has led to British citizens being vulnerable in a way that no other country's citizens are.

Baroness Scotland of Asthal: My Lords, I do not accept that British citizens are more vulnerable than other citizens. One of the difficulties in affirming the statement just made by the noble Lord is that every single bilateral treaty differs in some regard from every other single bilateral treaty. That is why it is not a multilateral treaty. Therefore it is difficult to accept without qualification the statement the noble Lord makes.
	The arrangements we have with our American counterparts are fair, proportionate and appropriate because, as I have said, the Government have ensured that real safeguards are in place. Section 71(3) and (4) require the judge to satisfy himself on the information before him that it is sufficient for the issue of a warrant of arrest. The judge may hear argument on that very point. That is a matter of some importance.
	I also remind noble Lords that the first time the provisions of the Human Rights Act were incorporated into the Extradition Act 2003 was an extremely important act on our part. A district judge cannot order a person's extradition if he or she believes that that would amount to a serious breach of their human rights. That is a very powerful tool. Even if extradition is ordered, there is a right to appeal to the High Court and I therefore do not accept that the Government have removed important safeguards from British citizens or, indeed, a citizen of any state who may find himself going through the extradition process in this country.
	It is true that the evidential requirements for extradition requests from the United States have changed. But it is not true that they have been abolished—I say that because it has almost been suggested that US requests can be made without the need to produce any information at all. I want also to emphasise that before the United States prosecutor can make a request for extradition in accordance with US law, he has to satisfy himself that there is probable cause. That does not need to be done in terms of our legislation, our law, but because US law determines that "probable cause" is the test which would apply before the request is made.

Lord Goodhart: My Lords, I apologise for interrupting again. Is the Minister suggesting that an American prosecutor's view of probable cause is as adequate a protection as the view of a British judge.

Baroness Scotland of Asthal: My Lords, I am not saying that. The noble Lord is trying to establish whether there is any correlation between probable cause and information. The indication given is that the information would be of such a low standard that it could not be effective in maintaining that there was some cogent evidence on which such an application could vest.
	I am simply saying that one has to look at the reality of the situation. First, probable cause would have to be obtained by the authorities to satisfy themselves that it would be proper to make that request and, secondly, they would have to comply with our provisions in relation to information. It is on that basis that I say that if we look at the test in relation to information and the test in relation to probable cause—although we can have a wonderful semantic lawyers' debate about whether there is a difference between one and the other—we can see that a fairly robust test has to be satisfied before one can go further.
	I have explained that the evidential requirements were not reciprocal under the old 1972 treaty, which, as noble Lords will remember, required the United States to provide prima facie evidence and the UK to show only probable cause. There was an inequality of process then as we required far more from the Americans than they did from us. So we were slower and we asked for more.
	We have now largely—but not entirely—levelled the playing field as the new treaty requires the United States to provide information about the offence for which extradition is sought from the United Kingdom. This roughly equates to probable cause. It is a non-negotiable requirement of the US Bill of Rights, which the United States cannot amend even with a lower evidential requirement than prima facie.
	An extradition request must contain the following: an accurate description of the person sought, including any information that will assist in establishing their location and identity; a statement of the facts of the offences; relevant texts of law describing essential elements of the offence for which extradition is sought and a description of the punishment prescribed for that offence; a copy of the warrant or order of arrest issued by a judge or other competent authority; and a copy of the charging documents.
	Where the person sought has already been convicted the requesting state is required to provide additional information. This includes copies of any relevant court judgments of conviction, a copy of the sentence imposed and a statement establishing to what extent that sentence has been carried out. In addition, a district judge cannot order a person's extradition if dual criminality does not apply. I hope your Lordships will agree that it cannot be claimed that we are extraditing persons to the United States based on no evidence of any criminal conduct.
	I am genuinely disappointed that the United States have not yet found the time to complete the necessary legal processes so that we can exchange instruments of ratification to ensure that the provisions of the new treaty are implemented on both sides of the Atlantic. I have checked to see whether this is the first time that the United States have taken so long and, during my inquiries, I looked at the 1972 treaty. I regret to tell your Lordships that that was not ratified by the United States until 1976. It is therefore wrong to assume that the current situation suggests that the Americans have no intention of completing the ratification process. It is clear that their processes take a long time. We know that in this House the Government cannot always get their business when they wish. We, too, have to await the usual channels.
	Nevertheless, the Government are not being complacent. As your Lordships are aware, the treaty is with the United States Senate for consideration, but the United States authorities are limited in what they can do to influence its consideration. However, I hope your Lordships will be pleased to learn that my right honourable friend the Home Secretary raised this very matter with the new US Attorney-General, Alberto Gonzales, in the margins of the G8 meeting in Sheffield on 16 June. I hope noble Lords will be reassured to know that the Attorney-General had the misfortune to be sitting with me on a bus, from which he could not escape, for some considerable time. So I too had the privilege and pleasure of explaining to him, in quite graphic detail, why this matter was causing your Lordships acute anxiety.
	Mr Gonzales was sympathetic to our concerns—I shall not say it was because he could not leave the bus—and promised to do what was within his power to do. Separately, he had a very serious conversation with my right honourable friend the Home Secretary and my noble and learned friend the Attorney-General. There was real understanding of the position in which we all find ourselves. I can assure your Lordships that the Government will continue to seize every opportunity to urge the United States to complete its ratification process. However, I acknowledge that the United States has not progressed the ratification of this treaty as we would have hoped.
	I hope I have said enough to assure your Lordships that the process that we have adopted is robust. As it would be highly improper, I shall not comment on any current case. The whole point of having a robust judicial process is that our judges determine whether an individual should be extradited from this country or not, applying our law, the European Convention on Human Rights and the other safeguards that we have put in the Act. In that respect, I maintain that the Government have done absolutely nothing other than to act in the interests of justice by introducing a more efficient and fair extradition process, while preserving important safeguards. It may be foolish to hope that this may be the last occasion on which I shall have the privilege of delighting your Lordships with this particular debate.

House adjourned at eleven minutes past five o'clock.